It’s an underpublicised certainty that a Barlborough residential lease is a wasting asset. As the lease term reduces so does the value of the property. The extent of this is taken for granted in the early years due to the depreciation being disguised by increases in the Barlborough property market.Once your lease gets to 85ish years, you should start considering 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 due. Most leasehold owners in Barlborough will be able to extend under the legislation; however a lawyer should be able to confirm if you are eligibility. In some situations you may not be entitled. There are also strict timetables and procedures to be adhered to once the process is initiated and you will need to be guided by your lawyer from beginning to end of the process.
It is conventional wisdom that a residential leasehold with in excess of one hundred years unexpired lease term is worth approximately the same as a freehold. Where an additional 90 years added to any lease with more than 35 years left, the residence will be equivalent in value to a freehold for decades to come.
| Lender | Requirement |
|---|---|
| Accord Mortgages | 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. |
| Birmingham Midshires | 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must also be not less than 75 years at the outset of the mortgage. |
Engaging our service gives you better control over the value of your Barlborough leasehold, as your property will be more valuable and marketable in terms of lease length should you wish to sell. The lawyers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Stanley was the the leasehold owner of a studio flat in Barlborough on the market with a lease of a little over fifty eight years outstanding. Stanley on an informal basis contacted his landlord a well known Bristol-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 an increased rent to £100 annually. Ordinarily, ground rent would not be due on a lease extension were Stanley to invoke his statutory right. Stanley obtained expert advice and was able to make a more informed judgement and handle with the matter and ending up with a market value flat.
Last year we were phoned by Dr W Flores , who acquired a basement flat in Barlborough in August 1998. The question was if we could approximate the compensation to the landlord would likely be for a 90 year extension to my lease. Similar properties in Barlborough with a long lease were in the region of £189,000. The average ground rent payable was £55 collected yearly. The lease terminated in 2078. Considering the 53 years as a residual term we estimated the compensation to the landlord to extend the lease to be between £28,500 and £33,000 plus costs.
Last March we were called by Mr and Mrs. S David , who owned a one bedroom apartment in Barlborough in February 2009. The dilemma was if we could shed any light on how much (roughly) premium could be to prolong the lease by an additional years. Identical homes in Barlborough with an extended lease were worth £290,000. The average ground rent payable was £45 invoiced per annum. The lease ran out in 2098. Considering the 73 years remaining we approximated the compensation to the landlord for the lease extension to be within £9,500 and £11,000 exclusive of legals.