Unfortunately that a Barking residential lease is a deteriorating asset. The lease value drops in proportion to its lease length. The extent of this is taken for granted in the early years due to the reduction being disguised by increases in the Barking property prices.Where your lease has approximately 90 years left, you need to 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 dips below eighty years - otherwise a higher amount will be due. Most leasehold owners in Barking will be able to extend under the legislation; however a lawyer will be able to clarify if you are eligibility. In some situations you may not be entitled. There are also strict deadlines and procedures to be adhered to once the process has commenced and you will need to be guided by your lawyer from beginning to end of the process.
Leasehold premises in Barking with over 100 years left on the lease are often regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your property. In such circumstances there is often little to be gained by buying the freehold unless savings on ground rent and estate charges warrant it.
| Lender | Requirement |
|---|---|
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage should be declined (see exception below). Leases with greater than 70 years but fewer than 85 years remaining must be referred to issuing office. 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; |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Santander | You must report the unexpired lease term to us and await our instructions if: 1. the unexpired term assumed by our valuer is between 55 and 82 years, but the actual unexpired term differs by more than one year (whether longer or shorter); or 2. the unexpired term assumed by our valuer is more than 82 years but the actual unexpired term is less than 82 years; or 3. no valuation report is provided However, we will not accept a lease where on expiry of the mortgage: (i) less than 50 years remain and all or part of the loan is repaid on an interest-only basis: or (ii) less than 30 years remain and the loan is repaid on a capital and interest basis We will accept a lease that has been extended under the provisions of the Leasehold Reform Act 1993 provided statutory compensation would be available to the leaseholder. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
| 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. |
Regardless of whether you are a tenant or a freeholder in Barking,the lease extension solicitors 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 Barking valuers.
Last Christmas Jackson, started to get close to the eighty-year threshold with the lease on his one bedroom apartment in Barking. In buying his property two decades ago, the lease term was of minimal significance. by good luck, he recognised he needed to take steps soon on Extending the lease. Jackson arranged for a lease extension just in the nick of time in July. Jackson and the landlord ultimately agreed on a premium of £5,000 . If he had missed the deadline, the price would have become more exhorbitant by a minimum £1,025.
Last Winter we were e-mailed by Ms G Scott , who moved into a newly refurbished flat in Barking in April 2009. The dilemma was if we could estimate the compensation to the landlord could be for a 90 year extension to my lease. Similar homes in Barking with an extended lease were worth £260,000. The mid-range amount of ground rent was £50 collected every twelve months. The lease terminated on 27 January 2096. Having 71 years left we estimated the compensation to the freeholder for the lease extension to be within £9,500 and £11,000 exclusive of legals.
An example of a Lease Extension case for a Barking residence is 240 Strone Road in January 2014. the tribunal held that the price to be paid for the freehold interest was£23,538 of which£13,017 is attributable to the ground floor flat and £10,521 to the first floor flat. This case related to 2 flats. The unexpired term was 65.5 years.