Barnet leases on residential properties are gradually diminishing in value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of your lease becomes more expensive. Legislation has been in place for sometime now which entitles qualifying Barnet residential leaseholders to extend the terms of long leases. If you are a leasehold owner in Barnet you would be well advised to investigate if your lease has between seventy and ninety years left. In particular once the remaining lease term slips under eighty years, the cost of any lease extension sharply increases as an element of the premium you pay is what is known as a marriage value
Leasehold properties in Barnet with over one hundred years unexpired on the lease are often 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 upside in buying the reversionary interest unless savings on ground rent and service charges merit it.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Santander | If the property is leasehold, the remaining unexpired lease term at the end of the new mortgage term must be at least 50 years where any part of the mortgage is on Interest Only and 30 years if all loan parts are on Capital Repayment and Interest. You must report the unexpired lease term to us and await our instructions if:
|
| Skipton Building Society | 85 years from the date of completion of the mortgage For Buy to Let cases: - lettings must not breach any of the lessee’s covenants; and - consent of the lessor to lettings must be obtained if necessary |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Regardless of whether you are a tenant or a landlord in Barnet,the lease extension solicitors that we work with will always be happy to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Barnet valuers.
Jasper owned a high value apartment in Barnet on the market with a lease of just over 59 years outstanding. Jasper on an informal basis 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 an increased rent to £200 per annum. No ground rent would be due on a lease extension were Jasper to invoke his statutory right. Jasper procured expert advice and secured an acceptable resolution without going to tribunal and readily saleable.
In 2014 we were phoned by Ms Jessica Gómez who, having was assigned a lease of a basement apartment in Barnet in April 2010. The question was if we could shed any light on how much (approximately) price would be for a 90 year extension to my lease. Comparative premises in Barnet with 100 year plus lease were valued about £250,400. The average amount of ground rent was £65 billed yearly. The lease terminated in 2090. Given that there were 64 years remaining we approximated the compensation to the landlord for the lease extension to be within £19,000 and £22,000 not including fees.
An example of a Lease Extension decision for a Barnet property is Flat 2 2 Netherfield Road in April 2010. The Tribunale held that premium payable for a 90 year extension to the existing Lease should be £7,705. This case affected 1 flat. The number of years remaining on the existing lease(s) was 76 years.