East Barnet leases on residential properties are gradually decreasing in value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of the lease gets more expensive. Legislation has been in place for sometime now which permits qualifying East Barnet residential leaseholders to extend the terms of long leases. Where you are a leasehold owner in East Barnet you must investigate if your lease has between seventy and 90 years remaining. In particular once the remaining lease term slips under eighty years, the compensation to the landlord for any lease extension sharply increases as part of the premium you pay is what is known as a marriage value
It is generally considered that a property with over one hundred years remaining is worth approximately the equivalent as a freehold. Where an further 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 |
|---|---|
| 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. |
| 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; |
| Skipton Building Society | 85 years from the date of completion of the mortgage For Buy to Let cases: - lettings must not breach any of the lessee’s covenants; and - consent of the lessor to lettings must be obtained if necessary |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Lease extensions in East Barnet can be a difficult process. We recommend you secure guidance from a lawyer and valuer well versed in the legislation and lease extension process.
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 in-depth market knowledge dealing with East Barnet lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
Eliot owned a studio apartment in East Barnet being marketed with a lease of a few days over 72 years remaining. Eliot informally contacted his landlord a well known Manchester-based freehold company for a lease extension. The landlord indicated a willingness to grant an extension taking the lease to 125 years subject to a rise in the rent to £125 annually. No ground rent would be payable on a lease extension were Eliot to invoke his statutory right. Eliot procured expert advice and secured satisfactory deal informally and sell the flat.
Last Spring we were approach by Ms Courtney Richardson , who moved into a newly refurbished apartment in East Barnet in March 2007. The question was if we could estimate the compensation to the landlord could be to prolong the lease by ninety years. Similar premises in East Barnet with an extended lease were worth £218,000. The average amount of ground rent was £45 billed yearly. The lease ended in 2087. Considering the 63 years left we estimated the premium to the freeholder for the lease extension to be within £17,100 and £19,800 plus legals.
An example of a Freehold Enfranchisement matter before the tribunal for a East Barnet premises is 23 Beaconsfield Road in July 2013. The Tribunals decided that the amount payable was £31,203 for the freehold. This case related to 2 flats. The unexpired lease term was 70.31 years.