With a long leasehold premises in Barkingside, you are actually purchasing a right to reside in a property for a prescribed time frame. Modern flat leases are usually granted for 99 years or 125. Even though this may appear like a lengthy period of time, you may consider extending the lease sooner rather than later. The general rule is that the shorter the number of years is the cost of extending the lease becomes disproportionately more expensive notably when there are fewer than 80 years remaining. Residents in Barkingside with a lease approaching 81 years unexpired should seriously consider extending it sooner than later. Once the lease term has less than 80 years remaining, under the relevant Act the freeholder can calculate and charge a greater premium, assessed on a technical computation, known as “marriage value” which is payable.
Leasehold residencies in Barkingside with in excess of one hundred years outstanding on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your property. In such situations there is often little to be gained by buying the reversionary interest unless savings on ground rent and maintenance charges justify it.
| Lender | Requirement |
|---|---|
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage are not acceptable. 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; |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| 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. |
| 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 conveyancing solicitor we work with provide it.
Harry owned a conversion apartment in Barkingside being marketed with a lease of a little over 59 years left. Harry on an informal basis approached his landlord being a well known local-based freehold company for a lease extension. The landlord was keen to grant an extension on non-statutory terms taking the lease to 125 years subject to an increased rent to £125 annually. No ground rent would be payable on a lease extension were Harry to invoke his statutory right. Harry procured expert legal guidance and was able to make an informed decision and deal with the matter and readily saleable.
Last month we were contacted by Ms Sophia Wood , who purchased a first floor flat in Barkingside in August 1997. The question was if we could approximate the premium would be for a 90 year lease extension. Identical properties in Barkingside with 100 year plus lease were in the region of £290,000. The average ground rent payable was £60 collected yearly. The lease concluded in 2106. Having 80 years as a residual term we approximated the compensation to the landlord for the lease extension to be within £13,300 and £15,400 plus professional charges.
An example of a Lease Extension matter before the tribunal for a Barkingside residence is 104 Coventry Road in July 2014. The Tribunal determined that the lease extension permium should be £22,896.15 This case was in relation to 1 flat. The number of years remaining on the existing lease(s) was 60.29 years.