Kennington leases on residential properties are gradually decreasing in value. The shorter the remaining lease term becomes, the less it is worth – and accordingly any extension of the lease becomes more expensive. Legislation has been in place for sometime now allowing qualifying Kennington residential leaseholders to extend the terms of long leases. If you are a leasehold owner in Kennington you would be well advised to investigate if your lease has between seventy and 90 years left. There are compelling reasons why a Kennington flat owner with a lease having around eighty years unexpired should take action to make sure that a lease extension is actioned without delay
Leasehold properties in Kennington with in excess of 100 years unexpired on the lease are sometimes referred to as ‘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 purchasing the reversionary interest unless savings on ground rent and service charges merit 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. |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Coventry Building Society | A minimum of 70 years unexpired lease at completion for all scheme types apart from Lifetime Mortgages (Equity Release), which require a minimum unexpired term of 80 years at completion. |
| 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. |
Regardless of whether you are a tenant or a landlord in Kennington,the lease extension experts that we work with will always be prepared to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with Kennington valuers.
Following lengthy correspondence with the freeholder of her leasehold apartment in Kennington, Nicole started the lease extension process just as the lease was nearing the all-important 80-year mark. The transaction completed in November 2006. The freeholder’s costs were negotiated to below 450 pounds.
In 2010 we were e-mailed by Dr V Watson who, having was assigned a lease of a newly refurbished apartment in Kennington in August 2004. We are asked if we could approximate the price could be to prolong the lease by 90 years. Identical flats in Kennington with a long lease were worth £233,200. The mid-range ground rent payable was £60 collected monthly. The lease termination date was on 17 November 2087. Taking into account 61 years left we approximated the compensation to the landlord to extend the lease to be within £22,800 and £26,400 exclusive of fees.
An example of a Lease Extension matter before the tribunal for a Kennington premises 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 unexpired lease term was 74.77 years.