As the length of the unexpired term of a Barnehurst domestic lease diminished so does its value and therefore the value of your property. If the lease has, in excess of 125 years remaining then this decrease may be fractional however there will become a stage when a lease has less than 80 years left as part of the premium you will incur is what is termed as a marriage value. This could be significant. It is the main rational as to why you should extend the lease sooner as opposed to later. Many flat owners in Barnehurst will meet the qualifying criteria; that being said a lawyer should be able to confirm if you are eligible for a lease extension. In certain situations you may not qualify, the most frequent reason being that you have not been the owner of the property for two years.
It is generally considered that a residential leasehold with over 100 years unexpired lease term is worth roughly the equivalent as a freehold. Where an further ninety years added to all but the shortest lease, the premises will be equivalent in value to a freehold for decades to come.
| Lender | Requirement |
|---|---|
| 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. |
| 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. |
| 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. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Irrespective of whether you are a tenant or a landlord in Barnehurst,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 Barnehurst valuers.
Muhammad owned a conversion flat in Barnehurst on the market with a lease of just over 59 years remaining. Muhammad informally approached his freeholder being a well known Manchester-based freehold company for a lease extension. The freeholder was prepared to agree an extension on non-statutory terms taking the lease to 125 years subject to a new rent to start with set at £100 per annum and increase every twenty five years thereafter. Ordinarily, ground rent would not be due on a lease extension were Muhammad to exercise his statutory right. Muhammad obtained expert advice and was able to make an informed decision and handle with the matter and ending up with a market value flat.
Last year we were called by Mr and Mrs. D Collins , who bought a newly refurbished apartment in Barnehurst in July 2006. The question was if we could shed any light on how much (roughly) compensation to the landlord would be for a 90 year extension to my lease. Comparable premises in Barnehurst with 100 year plus lease were valued around £205,000. The mid-range ground rent payable was £50 invoiced yearly. The lease finished in 2105. Having 79 years left we approximated the premium to the landlord for the lease extension to be between £8,600 and £9,800 plus fees.
An example of a Lease Extension case for a Barnehurst premises is Various @ Colombus Square in January 2012. the Tribunal calculated the premiums to be paid for new leases for each of the flats in Mariners Walk to be £3822 and the premium to be paid for the new lease of 2 Knights Court to be £4439. This case related to 13 flats. The unexpired residue of the current lease was 76 years.