With a long leasehold property in South Kensington, you are actually purchasing a right to live in a property for a set period of time. In recent years flat leases are usually granted for 99 years or 125. Many leasehold owners become complacent as this seems like a long period of time, you may consider a lease extension sooner rather than later. The general rule is that the shorter the lease is the cost of extending the lease increases markedly notably once there are fewer than eighty years left. Leasehold owners in South Kensington with a lease nearing 81 years remaining should seriously think of extending it as soon as possible. When a lease has below eighty years left, under the current statute the landlord can calculate and demand a larger premium, assessed on a technical calculation, known as “marriage value” which is payable.
Leasehold premises in South Kensington with in excess of 100 years remaining on the lease are sometimes 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 upside in purchasing the freehold unless savings on ground rent and service charges justify it.
| Lender | Requirement |
|---|---|
| Accord Mortgages | 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. |
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage should be declined (see exception below). Leases with greater than 70 years but fewer than 85 years remaining must be referred to issuing office. Leases with fewer than 70 years should only be referred to the issuing office where the following scenario applies, as discretion may be applied subject to bank approval: • Property is located in any of the following prestigious developments: Cadogan, Crown, Grosvenor, Howard de Walden, Portman or Wellcome Trust Estates in Central London AND • The value of the property subject to the short remaining term is £500,000 or more AND • The loan to value does not exceed 90% for purchases, 90% like for like re-mortgages, 80% for re-mortgages with any element of capital raising and 80% for existing Barclays mortgage borrowers applying for additional borrowing; |
| National Westminster Bank | Mortgage term plus 30 years. |
| Skipton Building Society | 85 years from the date of completion of the mortgage For Buy to Let cases: - lettings must not breach any of the lessee’s covenants; and - consent of the lessor to lettings must be obtained if necessary |
Regardless of whether you are a tenant or a freeholder in South Kensington,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 in-depth market knowledge and the close ties they enjoy with South Kensington valuers.
Subsequent to protracted correspondence with the freeholder of her purpose-built flat in South Kensington, Jordan initiated the lease extension process as the 80 year deadline was fast nearing. The transaction completed in March 2013. The freeholder’s costs were restricted to under 450 GBP.
In 2014 we were called by Dr Emily Rogers who, having was assigned a lease of a studio apartment in South Kensington in January 2001. The dilemma was if we could shed any light on how much (approximately) premium would likely be to prolong the lease by a further 90 years. Comparative properties in South Kensington with an extended lease were worth £205,000. The mid-range amount of ground rent was £50 invoiced yearly. The lease ended in 2104. Considering the 79 years remaining we approximated the premium to the landlord for the lease extension to be between £8,600 and £9,800 plus professional charges.
An example of a Lease Extension matter before the tribunal for a South Kensington property is Flat 16 21/22 Stanhope Gardens in November 2010. the Leasehold Valuation Tribunal concluded that the premium to be paid by the tenant on the grant of a new lease, in accordance with section 56 and Schedule 13 of the Leasehold Reform, Housing and Urban Development Act 1993, was £106,975 This case was in relation to 1 flat. The unexpired term as at the valuation date was 51.93 years.