Barking leases on domestic properties are gradually losing value. Where your lease has approximately 90 years unexpired, you should start considering the need for a lease extension. An important point to note is that it is financially advisable for the lease extension to take place before the term of the existing lease falls below 80 years - otherwise a higher amount will be payable. Flat owners in Barking will mostly qualify for a lease extension; however It would be wise to check with a lawyer to confirm if you qualify. In some cases you may not be entitled. There are also strict timetables and procedures to comply with once the process has commenced so it’s prudent to be guided by a lawyer during the process.
Leasehold premises in Barking with more than 100 years outstanding 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 property. In such situations there is often little to be gained by purchasing the freehold unless savings on ground rent and maintenance charges justify it.
| 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. |
| 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. |
| 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. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
Regardless of whether you are a tenant or a freeholder in Barking,the lease extension experts that we work with will always be prepared 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.
Trailing protracted negotiations with the freeholder of her basement apartment in Barking, Jordan initiated the lease extension process as the 80 year mark was rapidly coming. The transaction completed in June 2015. The landlord’s fees were restricted to approximately 500 pounds.
Last Autumn we were approach by Mr and Mrs. F Hall , who took over the lease of a garden flat in Barking in November 2010. The dilemma was if we could estimate the compensation to the landlord would be to prolong the lease by a further 90 years. Identical residencies in Barking with a long lease were in the region of £270,000. The average amount of ground rent was £55 billed monthly. The lease termination date was in 2099. Given that there were 74 years outstanding we approximated the compensation to the landlord to extend the lease to be within £9,500 and £11,000 plus professional charges.
An example of a Lease Extension case 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 related to 2 flats. The unexpired lease term was 65.5 years.