It’s a harsh certainty that a Barking residential lease is a deteriorating asset. The lease value reduces 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 market.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 slips below eighty 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 if you are eligibility. In some situations you may not qualify. There are also strict deadlines and procedures to be adhered to once the process has commenced and you will need to be guided by your conveyancer for the duration of the process.
It is conventional wisdom that a property with in excess of one hundred years remaining is worth approximately the same as a freehold. Where an further ninety years added to all but the shortest lease, the residence will be equivalent in value to a freehold for decades to come.
| Lender | Requirement |
|---|---|
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must also be not less than 75 years at the outset of the mortgage. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
| 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. |
Regardless of whether you are a tenant or a freeholder in Barking,the lease extension experts 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.
Alexander owned a 2 bedroom apartment in Barking on the market with a lease of a little over sixty years left. Alexander on an informal basis spoke with his landlord a well known London-based freehold company and enquired on a premium to extend the lease. The freeholder indicated a willingness to extend the lease to 125 years on the basis of an increased rent to £50 per annum. Ordinarily, ground rent would not be due on a lease extension were Alexander to exercise his statutory right. Alexander obtained expert legal guidance and was able to make an informed decision and handle with the matter and readily saleable.
Last Christmas we were e-mailed by Mr and Mrs. F Wilson , who completed a purpose-built flat in Barking in April 1997. We are asked if we could approximate the price would likely be to prolong the lease by ninety years. Comparable homes in Barking with 100 year plus lease were worth £191,000. The mid-range ground rent payable was £65 billed yearly. The lease elapsed on 27 August 2083. Considering the 58 years left we approximated the compensation to the landlord for the lease extension to be between £23,800 and £27,400 plus professional charges.
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 was in relation to 2 flats. The unexpired lease term was 65.5 years.