Unfortunately that a North Kensington residential lease is a wasting asset. The lease value reduces in proportion to its lease length. The extent of this is taken for granted in the early years due to the reduction being disguised by increases in the North Kensington property market.Where your lease has approximately 90 years left, you need to start considering a lease extension. If lease term dips below 80 years, you will then be required to pay half of the property's 'marriage value' in addition to the usual cost of the lease extension to the landlord. Marriage value is the amount of extra value that a lease extension will add the property The majority of leasehold owners in North Kensington will be able to extend under the legislation; however a conveyancing solicitor should be able to confirm if you qualify for an extension. In some situations you may not qualify. There are also strict timetables and procedures to follow once the process is initiated and you will need to be guided by your conveyancer throughout the formalities.
Leasehold residencies in North Kensington with more than one hundred years left on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your home. In such situations there is often little to be gained by purchasing the freehold unless savings on ground rent and service charges justify it.
| Lender | Requirement |
|---|---|
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must also be not less than 75 years at the outset of the mortgage. |
The conveyancers that we work with procure North Kensington lease extensions and help protect your position. A lease extension can be arranged to be completed to coincide with a change of ownership so the costs of the lease extension are paid for using part of the sale proceeds. You really do need expert legal advice in this difficult and technical area of law. The conveyancing solicitor we work with provide it.
Jude owned a high value flat in North Kensington on the market with a lease of fraction over 61 years unexpired. Jude informally approached his landlord a well known Manchester-based freehold company for a lease extension. The landlord was keen to give an extension on non-statutory terms taking the lease to 125 years on the basis of a new rent to start with set at £200 per annum and increase every 25 years thereafter. Ordinarily, ground rent would not be due on a lease extension were Jude to exercise his statutory right. Jude procured expert legal guidance and was able to make an informed judgement and handle with the matter and readily saleable.
Last June we were contacted by Mr and Mrs. P Rivera , who purchased a ground floor apartment in North Kensington in January 2003. We are asked if we could estimate the compensation to the landlord could be for a 90 year lease extension. Comparable homes in North Kensington with a long lease were in the region of £240,600. The average ground rent payable was £60 collected annually. The lease ran out on 15 February 2087. Considering the 62 years remaining we calculated the compensation to the freeholder for the lease extension to be between £21,900 and £25,200 not including expenses.
An example of a Lease Extension case for a North Kensington residence is 93 Oakwood Court in June 2010. the LVT determined that the premium to be paid for the new lease was £492,083, This case was in relation to 1 flat. The unexpired term was 37.79 years.