Unfortunately that a Barking residential lease is a deteriorating asset. As the lease term diminishes so does the value of the property. The extent of this is taken for granted in the first few years due to the deflation being disguised by increases in the Barking property prices.Where your lease has approximately 90 years left, you should start considering 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 lower than eighty years - otherwise a higher premium will be due. Most flat owners in Barking will be able to extend under the legislation; however a conveyancer will be able to clarify if you qualify for an extension. In some cases you may not be entitled. There are also strict timetables and procedures to be adhered to once the process has commenced and you will need to be guided by your conveyancing solicitor from beginning to end of the process.
It is generally accepted that a property with in excess of one hundred years remaining is worth approximately the equivalent as a freehold. Where an additional 90 years added to all but the shortest lease, the property will be worth the same as a freehold for many years ahead.
| 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. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
Irrespective of whether you are a tenant or a freeholder in Barking,the lease extension lawyers that we work with will always be happy to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with Barking valuers.
Trailing protracted discussions with the freeholder of her purpose-built apartment in Barking, Kelsey initiated the lease extension process as the eighty year mark was rapidly nearing. The transaction was finalised in April 2014. The landlord’s costs were restricted to below 500 GBP.
In 2009 we were called by Mr and Mrs. M Anderson who, having completed a basement flat in Barking in June 2005. We are asked if we could estimate the premium would likely be to extend the lease by an additional years. Similar premises in Barking with an extended lease were worth £246,800. The average ground rent payable was £60 billed per annum. The lease terminated in 2076. Having 50 years as a residual term we calculated the compensation to the landlord for the lease extension to be within £44,700 and £51,600 exclusive of expenses.
An example of a Lease Extension decision 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 affected 2 flats. The unexpired term was 65.5 years.