There is no doubt about it a leasehold property in Kennington is a wasting asset as a result of the shortening lease. If the residual term has, more than 99 years remaining then this decrease may be of little impact however there will become a point in time when a lease has fewer than 80 years unexpired as part of the premium you will incur is what is known as a marriage value. This could be significant. It is the main logic behind why you should consider extending sooner rather than later. Many flat owners in Kennington will qualify for this right; however a conveyancing solicitor will be able to confirm if you qualify to extend your lease. In limited situations you may not qualify, the most frequent reason being that you have not been the owner of the property for two years.
Leasehold residencies in Kennington with more than one hundred years outstanding 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 circumstances there is often little upside in buying the freehold unless savings on ground rent and service charges justify it.
| Lender | Requirement |
|---|---|
| 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 are not acceptable. 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. For Shared Ownership, the remaining term of the lease must be at least 30 years plus the term of the mortgage at the outset of the mortgage. |
| 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 |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
The lawyers that we work with undertake Kennington 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 conveyancer we work with provide it.
Twenty four months ago Dylan, started to get near to the eighty-year mark with the lease on his two bedroom flat in Kennington. In buying his property two decades ago, the unexpired term was of minimal interest. Thankfully, he realised he would soon be paying an escalated premium for Extending the lease. Dylan arranged for a lease extension at the eleventh hour last June. Dylan and the freeholder via the managing agents ultimately agreed on the final figure of £5,000 . If he failed to meet the deadline, the sum would have increased by at least £900.
Last Summer we were e-mailed by Mr S Hernández , who owned a one bedroom apartment in Kennington in May 2007. The dilemma was if we could approximate the compensation to the landlord could be for a ninety year extension to my lease. Comparative properties in Kennington with an extended lease were in the region of £280,000. The average amount of ground rent was £45 invoiced monthly. The lease ended on 7 March 2096. Given that there were 70 years left we calculated the premium to the freeholder to extend the lease to be between £12,400 and £14,200 exclusive of expenses.
An example of a Lease Extension case for a Kennington residence is Ground Floor Flat 39 Bronsart Road in May 2010. Following a vesting order by West London County Court the Leasehold Valuation Tribunal concluded that the price to be paid for the extended lease of the premises was Thirteen Thousand Two hundred pounds (£13,200) in accordance with the valuation. The extended lease was granted for a term of 90 years from the expiry date of the Lease and at a peppercorn ground rent from the date of the vesting order. This case was in relation to 1 flat. The number of years remaining on the existing lease(s) was 74.77 years.