Unfortunately that a Barbican residential lease is a deteriorating asset. As the lease term reduces so does the value of the property. The extent of this is not fully appreciated in the first few years due to the deflation being disguised by increases in the Barbican property prices.Once your lease gets to 85ish years, you need to start thinking about a lease extension. If lease term falls under eighty years, you will then be required to pay half of the property's 'marriage value' in addition to the usual cost of the lease extension to the landlord. Marriage value is the amount of extra value that a lease extension will add the property Most flat owners in Barbican will be able to extend under the legislation; however a conveyancing solicitor will be able to confirm whether you qualify for an extension. In some cases you may not be entitled. There are also strict timeframes and procedures to follow once the process has commenced and you will need to be guided by your lawyer for the duration of the process.
Leasehold premises in Barbican with over 100 years unexpired on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your home. In such situations there is often little to be gained by buying the freehold unless savings on ground rent and maintenance charges merit it.
| Lender | Requirement |
|---|---|
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage are not acceptable. 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. |
| 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. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
The lawyers that we work with undertake Barbican lease extensions and help protect your position. A lease extension can be arranged to be completed to coincide with a change of ownership so the costs of the lease extension are paid for using part of the sale proceeds. You really do need expert legal advice in this difficult and technical area of law. The lawyer we work with provide it.
Off the back of protracted discussions with the landlord of her leasehold flat in Barbican, Erin started the lease extension process as the 80 year mark was swiftly advancing. The lease extension was finalised in October 2011. The freeholder’s charges were kept to an absolute minimum.
Last Winter we were contacted by Dr O Thompson , who acquired a newly refurbished apartment in Barbican in October 2001. We are asked if we could shed any light on how much (roughly) price would likely be to prolong the lease by ninety years. Similar premises in Barbican with an extended lease were valued around £250,000. The average amount of ground rent was £50 invoiced quarterly. The lease elapsed in 2095. Taking into account 69 years as a residual term we approximated the compensation to the freeholder for the lease extension to be within £9,500 and £11,000 not including professional charges.
An example of a Lease Extension case for a Barbican residence is 137 & 139 Haberdasher Street in December 2013. The Tribunal determines in accordance with section 48 and Schedule 13 of the Leasehold Reform, Housing and Urban Development Act 1993 that the premium for the extended lease for each Property should be £12,350.00. This case related to 2 flats. The remaining number of years on the lease was 72.39 years.