Barking leases on residential deteriorating in value. if your lease has approximately ninety years unexpired, you should start thinking about a lease extension. If lease term is less than eighty years, you will then be required to pay 50% 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 additional value that a lease extension will add to the property. Flat owners in Barking will mostly qualify for a lease extension; however it’s a good idea to check with a conveyancing solicitor to confirm if you qualify. In certain situations you may not qualify. There are prescribed deadlines and formalities to follow once the process is initiated so it’s sensible to be guided by a lawyer during the process.
Leasehold premises in Barking with in excess of 100 years left on the lease are often 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 reversionary interest unless savings on ground rent and estate charges merit it.
| Lender | Requirement |
|---|---|
| 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. |
| 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| 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. |
| 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 willing to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Barking valuers.
Omar owned a conversion flat in Barking on the market with a lease of a little over 72 years unexpired. Omar on an informal basis approached his freeholder a well known local-based freehold company and enquired on a premium to extend the lease. The freeholder was keen to give an extension on non-statutory terms taking the lease to 125 years subject to a rise in the rent to £50 per annum. Ordinarily, ground rent would not be due on a lease extension were Omar to exercise his statutory right. Omar procured expert advice and was able to make a more informed decision and handle with the matter and readily saleable.
Mr Aarav François purchased a purpose-built flat in Barking in April 2011. We are asked if we could shed any light on how much (roughly) compensation to the landlord would be for a ninety year lease extension. Similar residencies in Barking with an extended lease were in the region of £290,000. The average ground rent payable was £60 billed annually. The lease ran out in 2106. Having 80 years left we estimated the premium to the freeholder for the lease extension to be between £13,300 and £15,400 exclusive of expenses.
An example of a Lease Extension decision for a Barking premises 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 term as at the valuation date was 65.5 years.