Unfortunately that a Barnet residential lease is a wasting asset. The lease value drops in proportion to its lease length. The extent of this is not fully appreciated in the first few years due to the deflation being disguised by increases in the Barnet property market.Once your lease nears 85ish years, you should start thinking about a lease extension. If lease term slips under eighty years, you will then be required to pay 50% of the property's 'marriage value' on top of the usual cost of the lease extension to the landlord. Marriage value is the amount of additional value that a lease extension will add the property Most flat owners in Barnet will be able to extend under the legislation; however a lawyer will be able to clarify if you are eligibility. In some cases you may not be entitled. There are also strict timeframes and procedures to follow once the process is instigated and you will need to be guided by your conveyancer for the duration of the formalities.
Leasehold properties in Barnet with in excess of 100 years remaining 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 to be gained by purchasing the reversionary interest unless savings on ground rent and estate charges merit it.
| Lender | Requirement |
|---|---|
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| 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. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
| 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. |
Retaining our service will provide you better control over the value of your Barnet 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 have a in-depth market knowledge handling many hundreds of lease extensions or freehold purchase transactions.
After unsuccessful correspondence with the landlord of her leasehold apartment in Barnet, Lydia started the lease extension process as the 80 year mark was fast nearing. The lease extension completed in June 2014. The freeholder’s fees were kept to an absolute minimum.
Last Summer we were e-mailed by Ms U Smith , who completed a newly refurbished apartment in Barnet in April 1996. We are asked if we could approximate the compensation to the landlord would be for a 90 year lease extension. Comparable residencies in Barnet with 100 year plus lease were worth £230,800. The average amount of ground rent was £60 collected per annum. The lease lapsed in 2085. Considering the 60 years outstanding we estimated the premium to the landlord for the lease extension to be between £24,700 and £28,600 not including fees.
An example of a Lease Extension matter before the tribunal for a Barnet premises 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 related to 1 flat. The unexpired term was 76 years.