With a residential leasehold property in Kennington, you effectively rent it for a certain period of time. In recent years flat leases are usually granted for 99 years or 125. Even though this may appear like a lengthy period of time, you may think about extending the lease sooner as opposed to later. The general rule is that the shorter the lease is the cost of extending the lease becomes disproportionately more expensive notably once there are less than 80 years left. Residents in Kennington with a lease nearing 81 years unexpired should seriously consider extending it sooner as opposed to later. Once the lease term has less than 80 years outstanding, under the current Act the freeholder is entitled to calculate and levy a larger amount, based on a technical computation, strangely termed as “marriage value” which is due.
It is generally accepted that a residential leasehold with more than 100 years remaining is worth approximately the equivalent as a freehold. Where an additional 90 years added to all but the shortest lease, the premises will be worth the same as a freehold for many years in the future.
| 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; |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
| Yorkshire 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. |
Lease extensions in Kennington can be a difficult process. We recommend you secure guidance from a conveyancing solicitor and valuer with experience in lease extensions.
We provide you with an expert from a selection of lease extension solicitors, which ensures a targeted and efficient service as you have a dedicated port of call with an individual lawyer. Our lease extension solicitors have a wealth of experience dealing with Kennington lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
In 2014 Harry, came very close to the 80-year threshold with the lease on his one bedroom flat in Kennington. Having purchased his flat two decades ago, the lease term was of minimal interest. As luck would have it, he realised he would soon be paying way over the odds for a lease extension. Harry extended the lease at the eleventh hour in September. Harry and the landlord who owned the flat above in the end settled on sum of £5,000 . If he not met the deadline, the premium would have escalated by a minimum £1,150.
Last Spring we were called by Mrs U Morgan , who owned a first floor flat in Kennington in October 2011. The question was if we could approximate the compensation to the landlord would likely be to prolong the lease by ninety years. Comparative residencies in Kennington with a long lease were worth £295,000. The mid-range amount of ground rent was £45 billed monthly. The lease lapsed in 2100. Considering the 74 years outstanding we estimated the compensation to the freeholder for the lease extension to be within £8,600 and £9,800 exclusive of professional charges.
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 affected 1 flat. The unexpired residue of the current lease was 74.77 years.