Kirkstall leases on residential properties are gradually diminishing in value. The shorter the remaining lease term becomes, the less it is worth – and accordingly any extension of the lease gets more expensive. It is the case that most Kirkstall tenants have the right to extend their lease by an additional ninety years by virtue of the 1993 Leasehold Reform Act. Where you are a leasehold owner in Kirkstall you would be well advised to see if your lease has between seventy and ninety years remaining. In particular once the remaining lease term slips under 80 years, the premium due on any lease extension sharply increases as an element of the premium you will incur is what is known as a marriage value
Leasehold premises in Kirkstall with over 100 years remaining on the lease are often regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your premises. In such situations there is often little to be gained by buying the freehold unless savings on ground rent and estate charges justify it.
| Lender | Requirement |
|---|---|
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Chelsea Building Society | 85 years from the date of completion of the mortgage. Please ensure that you explain the implications of a short term lease to the borrower. |
| Godiva Mortgages | A minimum of 70 years unexpired lease at completion for all scheme types apart from Lifetime Mortgages (Equity Release), which require a minimum unexpired term of 80 years at completion. |
| National Westminster Bank | Mortgage term plus 30 years. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
Regardless of whether you are a tenant or a freeholder in Kirkstall,the lease extension experts that we work with will always be happy to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with Kirkstall valuers.
In recent months Seth, started to get near to the 80-year threshold with the lease on his two bedroom apartment in Kirkstall. In buying his home twenty years ago, the length of the lease was of minimal significance. Luckily, he realised he needed to take steps soon on a lease extension. Seth was able to extend his lease just in the nick of time last January. Seth and the freeholder ultimately settled on an amount of £5,500 . If the lease had dropped lower than 80 years, the price would have gone up by at least £1,050.
Last June we were contacted by Dr Nathaniel Michel , who took over the lease of a one bedroom apartment in Kirkstall in November 2011. The question was if we could estimate the premium could be to extend the lease by an additional years. Comparative premises in Kirkstall with 100 year plus lease were in the region of £285,000. The average ground rent payable was £55 billed per annum. The lease concluded in 2105. Taking into account 80 years unexpired we approximated the premium to the landlord to extend the lease to be within £12,400 and £14,200 not including legals.
Last Winter we were approach by Mrs J Garcia , who moved into a basement apartment in Kirkstall in January 2009. We are asked if we could estimate the price would be to prolong the lease by a further 90 years. Similar flats in Kirkstall with a long lease were in the region of £200,800. The mid-range ground rent payable was £65 billed annually. The lease came to a finish on 23 February 2085. Having 60 years unexpired we estimated the compensation to the landlord to extend the lease to be between £20,900 and £24,200 plus costs.