It’s a harsh truth that a Barking residential lease is a deteriorating asset. The lease value drops in proportion to its lease length. 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 need to start thinking about 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 80 years - otherwise a higher amount will be due. Most leasehold owners in Barking will be able to extend under the legislation; however a conveyancer will be able to confirm whether you qualify for an extension. In some situations you may not qualify. There are also strict deadlines and procedures to follow once the process has commenced and you will need to be guided by your conveyancing solicitor throughout the formalities.
Leasehold premises in Barking with in excess of 100 years left on the lease are often referred to as ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your premises. In such circumstances there is often little upside in buying the reversionary interest unless savings on ground rent and service charges merit it.
| Lender | Requirement |
|---|---|
| Halifax | Minimum 70 years from the date of the mortgage. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. |
| 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. |
| 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. |
Lease extensions in Barking can be a difficult process. We recommend you obtain professional help from a conveyancer and valuer with experience in this area.
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 a wealth of experience procuring Barking lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
Evan owned a conversion apartment in Barking being marketed with a lease of a little over fifty eight years outstanding. Evan informally spoke with his landlord a well known Manchester-based freehold company and enquired on a premium to extend the lease. The landlord was prepared to grant an extension on non-statutory terms taking the lease to 125 years on the basis of an increased rent to £100 yearly. No ground rent would be payable on a lease extension were Evan to exercise his statutory right. Evan obtained expert advice and was able to make an informed decision and handle with the matter and sell the property.
In 2013 we were e-mailed by Mrs Ashleigh Brooks who, having acquired a purpose-built apartment in Barking in September 2006. We are asked if we could shed any light on how much (roughly) premium could be for a 90 year lease extension. Comparative residencies in Barking with a long lease were worth £255,000. The mid-range ground rent payable was £50 invoiced quarterly. The lease expiry date was on 22 August 2095. Given that there were 71 years left we approximated the compensation to the landlord to extend the lease to be between £9,500 and £11,000 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 residue of the current lease was 65.5 years.