Barbican leases on residential deteriorating in value. Where your lease has approximately ninety years remaining, you should start thinking about a lease extension. It is important to recognise that it is that it is desirable for a lease extension to take place before the term of the existing lease drops below eighty years - otherwise a higher premium will be due. Flat owners in Barbican will mostly qualify for a lease extension; however a solicitor will check if you qualify. In some situations you may not be entitled. There are prescribed timetables and steps to comply with once the process has commenced so it’s wise to be guided by a lawyer during the process.
Leasehold residencies in Barbican with more than 100 years outstanding on the lease are often regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your home. In such situations there is often little upside in purchasing the reversionary interest unless savings on ground rent and service charges justify it.
| 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. |
| 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. |
| 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. |
| 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. |
The conveyancing solicitors that we work with handle 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 conveyancer we work with provide it.
Muhammad was the the leasehold proprietor of a studio apartment in Barbican being marketed with a lease of a few days over sixty years outstanding. Muhammad on an informal basis approached his landlord a well known Bristol-based freehold company and enquired on a premium to extend the lease. The landlord was prepared to agree an extension on non-statutory terms taking the lease to 125 years subject to an increased rent to £125 annually. Ordinarily, ground rent would not be due on a lease extension were Muhammad to invoke his statutory right. Muhammad obtained expert advice and secured satisfactory deal informally and ending up with a market value flat.
Dr U Lambert completed a purpose-built apartment in Barbican in October 1996. The dilemma was if we could estimate the compensation to the landlord would likely be to prolong the lease by ninety years. Comparative flats in Barbican with 100 year plus lease were valued around £265,000. The average ground rent payable was £50 collected annually. The lease expired in 2099. Having 73 years outstanding we calculated the premium to the freeholder for the lease extension to be between £9,500 and £11,000 plus costs.
An example of a Lease Extension case for a Barbican property 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 affected 2 flats. The unexpired lease term was 72.39 years.