The market value of a leasehold property in Barnes is impacted by how many years the lease has left to run. If it is close to or less than 80 years you should expect difficulties on re-sale, so it is recommended to arrange for the lease to be extended prior to purchasing. It is preferable to commence the process of extending the lease is when the lease still has 82 years remaining so that a lease extension can be addressed well before the 80 year mark. Current legislation entitles Barnes qualifying lessees to an additional term of ninety years over and above the remaining term, at a nominal rent (zero ground rent). The reason of the valuation is to determine the amount payable by the lessee to the freeholder for the purchase of the lease extension.
It is generally accepted that a residential leasehold with in excess of 100 years unexpired lease term is worth approximately the same as a freehold. Where an further 90 years added to all but the shortest lease, the residence will be equivalent in value to a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| 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. |
| 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. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Yorkshire 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. |
Engaging our service will provide you increased control over the value of your Barnes leasehold, as your property will be more valuable and saleable in respect of lease length should you want to sell. The lawyers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Leo owned a high value apartment in Barnes on the market with a lease of a few days over sixty years unexpired. Leo informally contacted his freeholder a well known Manchester-based freehold company for a lease extension. The landlord was prepared to agree an extension on non-statutory terms taking the lease to 125 years on the basis of a new rent to start with set at £150 per annum and increase every twenty five years thereafter. Ordinarily, ground rent would not be payable on a lease extension were Leo to exercise his statutory right. Leo procured expert advice and secured an acceptable resolution informally and ending up with a market value flat.
In 2012 we were phoned by Mrs Chantelle Mason who, having acquired a purpose-built flat in Barnes in January 2000. The dilemma was if we could estimate the compensation to the landlord would be for a ninety year extension to my lease. Similar premises in Barnes with 100 year plus lease were worth £249,200. The mid-range ground rent payable was £60 billed every twelve months. The lease terminated in 2077. Taking into account 51 years remaining we approximated the premium to the landlord to extend the lease to be between £42,800 and £49,400 plus fees.
An example of a Freehold Enfranchisement matter before the tribunal for a Barnes property is 25 Petley Road in February 2010. The Tribunal determined that the price payable for the freehold of the subject premises should be £18,760. This case affected 2 flats. The number of years remaining on the existing lease(s) was 156.6 years and 66.6 years.