Unfortunately that a Kennington residential lease is a deteriorating asset. The lease value drops in proportion to its lease length. The extent of this is not fully appreciated in the first few years due to the deflation being disguised by increases in the Kennington property market.Where your lease has approximately ninety years left, you should start thinking about a lease extension. An important point to note is that it is desirable for lease extension to take place before the term of the existing lease slips lower than eighty years - otherwise a higher amount will be payable. Most leasehold owners in Kennington will be able to extend under the legislation; however a conveyancer will be able to confirm if you qualify for an extension. In some cases you may not qualify. There are also strict timetables and procedures to follow once the process is instigated and you will need to be guided by your conveyancer throughout the formalities.
It is conventional wisdom that a property with in excess of 100 years unexpired lease term is worth roughly the equivalent as a freehold. Where an additional 90 years added to all but the shortest lease, the property will be equivalent in value to a freehold for many years ahead.
| 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. |
| Godiva Mortgages | 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| 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. |
Irrespective of whether you are a tenant or a freeholder 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.
Twenty four months ago Joshua, started to get close to the eighty-year mark with the lease on his garden apartment in Kennington. Having bought his flat 19 years previously, the lease term was of little relevance. Thankfully, he recognised he needed to take action soon on a lease extension. Joshua extended the lease at the eleventh hour last May. Joshua and the freeholder via the managing agents subsequently settled on an amount of £6,000 . If the lease had dipped lower than 80 years, the premium would have gone up by a minimum £1,150.
Last month we were e-mailed by Dr Eliot González , who acquired a purpose-built apartment in Kennington in September 1998. We are asked if we could approximate the compensation to the landlord would be for a ninety year lease extension. Similar premises in Kennington with a long lease were valued around £265,200. The average amount of ground rent was £65 billed yearly. The lease concluded in 2092. Having 66 years unexpired we calculated the premium to the landlord to extend the lease to be within £15,200 and £17,600 plus fees.
An example of a Lease Extension decision 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 affected 1 flat. The number of years remaining on the existing lease(s) was 74.77 years.