Owning a apartment usually means owning a lease of the property, this is a ‘time-limited’ interest becoming shorter every day. your lease will usually be granted for a fixed period of time , ordinarily 99 or 125 years, although we have seen longer and shorter terms in Barnet. Clearly, the period of lease left reduces as time goes by. This is often overlooked and only becomes a problem when the residence has to be disposed of or refinanced. The fewer the years remaining the lower the value of the property and the more it will cost to extend the lease. Eligible long lease owners in Barnet have the right to extend the lease for an additional ninety years in accordance with Leasehold Reform legislation. Please give careful consideration before putting off your Barnet lease extension. Putting off that expense now simply increases the price you will ultimately incur to extend your lease
Leasehold properties in Barnet with in excess of 100 years remaining on the lease are often regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your property. In such situations there is often little to be gained by buying the freehold unless savings on ground rent and estate charges warrant it.
| Lender | Requirement |
|---|---|
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage should be declined (see exception below). Leases with greater than 70 years but fewer than 85 years remaining must be referred to issuing office. 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; |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| Lloyds TSB Scotland | Minimum 70 years from the date 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. |
| 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. |
Regardless of whether you are a tenant or a freeholder in Barnet,the lease extension experts 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.
Callum owned a 2 bedroom flat in Barnet on the market with a lease of a few days over fifty eight years unexpired. Callum on an informal basis contacted his landlord a well known London-based freehold company for a lease extension. The freeholder was keen to give an extension on non-statutory terms taking the lease to 125 years on the basis of a new rent at the outset set at £150 per annum and doubled every twenty five years thereafter. Ordinarily, ground rent would not be due on a lease extension were Callum to exercise his statutory right. Callum obtained expert legal guidance and secured an acceptable resolution informally and ending up with a market value flat.
In 2013 we were phoned by Dr F Davis who, having was assigned a lease of a recently refurbished apartment in Barnet in November 1995. The dilemma was if we could estimate the premium could be for a ninety year lease extension. Similar homes in Barnet with an extended lease were worth £250,400. The average ground rent payable was £65 invoiced quarterly. The lease terminated on 15 March 2089. Having 64 years remaining we calculated 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 case 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.