Owning a flat usually means owning a lease of the property, which has a set term of years. The lease will usually be granted for a set period of time , usually 99 or 125 years, although we have witnessed longer and shorter terms in Kennington. Inevitably, the term of lease left reduces as time goes by. This is often overlooked and only raises itself as an issue when the flat or house has to be disposed of or re-mortgaged. The fewer the years remaining the less it is worth and the more expensive it will be to extend the lease. Eligible long lease owners in Kennington have the right to extend the lease for a further ninety years in accordance with legislation. Please give due consideration before delaying your Kennington lease extension. Putting off the cost now only increases the price you will ultimately incur for a lease extension
Leasehold premises in Kennington with more than one hundred years unexpired on the lease are often regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your premises. In such situations there is often little upside in buying the reversionary interest unless savings on ground rent and estate charges justify it.
| Lender | Requirement |
|---|---|
| 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; |
| 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
Irrespective of whether you are a tenant or a freeholder in Kennington,the lease extension lawyers 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 Kennington valuers.
Last October Ollie, came precariously near to the 80-year threshold with the lease on his leasehold flat in Kennington. Having purchased his home 18 years previously, the unexpired term was of no bearing. by good luck, he became aware that he needed to take steps soon on a lease extension. Ollie was able to extend his lease just under the wire in June. Ollie and the freeholder via the managing agents eventually agreed on sum of £5,500 . If the lease had slipped below 80 years, the sum would have gone up by a minimum £1,000.
In 2010 we were e-mailed by Mr and Mrs. R Morel who, having completed a one bedroom apartment in Kennington in March 2012. We are asked if we could shed any light on how much (approximately) premium could be for a 90 year extension to my lease. Comparable properties in Kennington with 100 year plus lease were in the region of £280,000. The average ground rent payable was £45 invoiced quarterly. The lease finished on 16 February 2095. Considering the 69 years left we calculated the premium to the landlord to extend the lease to be within £12,400 and £14,200 exclusive of costs.
An example of a Lease Extension case for a Kennington flat 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.