When it comes to domestic leasehold premises in Barking, you effectively rent it for a certain amount of time. In recent years flat leases are usually granted for 99 years or 125. Many leasehold owners become complacent as this seems like a lengthy period of time, you should think about extending the lease sooner as opposed to later. The general rule is that the shorter the number of years is the cost of extending the lease increases markedly notably when there are less than eighty years remaining. Anyone in Barking with a lease drawing near to 81 years unexpired should seriously think of extending it sooner rather than later. Once the lease term has under 80 years outstanding, under the current Act the freeholder can calculate and charge a larger premium, based on a technical calculation, known as “marriage value” which is due.
Leasehold properties in Barking with over 100 years remaining on the lease are sometimes regarded as a ‘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 to be gained by buying the freehold unless savings on ground rent and maintenance charges justify it.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| 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. |
| 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. |
| Leeds Building Society | 85 years remaining from the start 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. |
Lease extensions in Barking can be a difficult process. We recommend you get guidance from a conveyancing solicitor and surveyor well versed in the legislation and lease extension process.
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 in-depth market knowledge 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.
Liam owned a conversion apartment in Barking being sold with a lease of a few days over fifty eight years remaining. Liam informally approached his freeholder a well known local-based freehold company for a lease extension. The landlord indicated a willingness to grant an extension taking the lease to 125 years on the basis of a new rent initially set at £200 per annum and doubled every 25 years thereafter. Ordinarily, ground rent would not be payable on a lease extension were Liam to exercise his statutory right. Liam obtained expert legal guidance and was able to make a more informed decision and handle with the matter and readily saleable.
Ms Laura Cooper owned a basement apartment in Barking in January 1999. The dilemma was if we could estimate the compensation to the landlord could be for a ninety year lease extension. Similar flats in Barking with a long lease were valued about £275,000. The average ground rent payable was £55 collected every twelve months. The lease concluded in 2102. Given that there were 76 years remaining we estimated the premium to the landlord for the lease extension to be within £9,500 and £11,000 plus legals.
An example of a Lease Extension matter before the tribunal for a Barking property 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 related to 2 flats. The unexpired lease term was 65.5 years.