It’s an underpublicised certainty that a Barkingside residential lease is a deteriorating asset. The lease value reduces in proportion to its lease length. The extent of this is not fully appreciated in the first few years due to the reduction being disguised by increases in the Barkingside property market.Where your lease has approximately ninety years left, you should 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 under eighty years - otherwise a higher amount will be payable. The majority of flat owners in Barkingside will be able to extend under the legislation; however a lawyer will be able to clarify whether you qualify for an extension. In some cases you may not qualify. There are also strict timeframes and procedures to follow once the process is initiated and you will need to be guided by your conveyancing solicitor for the duration of the process.
Leasehold properties in Barkingside with over one hundred years left on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your premises. In such situations there is often little to be gained by buying the reversionary interest unless savings on ground rent and service charges justify it.
| Lender | Requirement |
|---|---|
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage should be declined (see exception below). Leases with greater than 70 years but fewer than 85 years remaining must be referred to issuing office. Leases with fewer than 70 years should only be referred to the issuing office where the following scenario applies, as discretion may be applied subject to bank approval: • Property is located in any of the following prestigious developments: Cadogan, Crown, Grosvenor, Howard de Walden, Portman or Wellcome Trust Estates in Central London AND • The value of the property subject to the short remaining term is £500,000 or more AND • The loan to value does not exceed 90% for purchases, 90% like for like re-mortgages, 80% for re-mortgages with any element of capital raising and 80% for existing Barclays mortgage borrowers applying for additional borrowing; |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| National Westminster Bank | 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. |
The conveyancers that we work with handle Barkingside lease extensions and help protect your position. A lease extension can be arranged to be completed to coincide with a change of ownership so the costs of the lease extension are paid for using part of the sale proceeds. You really do need expert legal advice in this difficult and technical area of law. The lawyer we work with provide it.
Freddie was the the leasehold proprietor of a studio flat in Barkingside being sold with a lease of a little over sixty years remaining. Freddie informally contacted his landlord a well known Bristol-based freehold company and enquired on a premium to extend the lease. The freeholder was keen to agree an extension on non-statutory terms taking the lease to 125 years subject to a new rent at the outset set at £200 per annum and increase every twenty five years thereafter. No ground rent would be due on a lease extension were Freddie to exercise his statutory right. Freddie obtained expert advice and secured satisfactory resolution informally and readily saleable.
In 2013 we were approached by Mr and Mrs. W Collins who, having completed a one bedroom apartment in Barkingside in January 2009. We are asked if we could approximate the price would be for a 90 year extension to my lease. Comparative residencies in Barkingside with 100 year plus lease were valued around £203,200. The average amount of ground rent was £65 collected quarterly. The lease concluded in 2086. Having 61 years outstanding we approximated the premium to the landlord for the lease extension to be within £20,000 and £23,000 plus costs.
An example of a Lease Extension case for a Barkingside premises is 104 Coventry Road in July 2014. The Tribunal determined that the lease extension permium should be £22,896.15 This case affected 1 flat. The number of years remaining on the existing lease(s) was 60.29 years.