Barnsbury leases on residential properties are gradually losing value. The shorter the remaining lease term becomes, the less it is worth – and accordingly any extension of your lease gets more expensive. Legislation has been in place for sometime now which permits qualifying Barnsbury residential leaseholders to extend the terms of long leases. Where you are a leasehold owner in Barnsbury you would be well advised to see if your lease has between seventy and ninety years left. In particular once the remaining lease term slips under 80 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 residencies in Barnsbury with more than 100 years outstanding 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 home. In such situations there is often little upside in buying the freehold unless savings on ground rent and service charges merit it.
| 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. |
| 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. |
| Godiva Mortgages | 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. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. |
The conveyancers that we work with undertake Barnsbury lease extensions and help protect your position. A lease extension can be arranged to be completed to coincide with a change of ownership so the costs of the lease extension are paid for using part of the sale proceeds. You really do need expert legal advice in this difficult and technical area of law. The conveyancer we work with provide it.
Following lengthy correspondence with the landlord of her purpose-built flat in Barnsbury, Francesca commenced the lease extension process just as the lease was nearing the all-important eighty-year threshold. The lease extension was concluded in September 2006. The freeholder’s fees were kept to an absolute minimum.
In 2009 we were phoned by Mr and Mrs. J Bertrand who, having took over the lease of a purpose-built flat in Barnsbury in April 2007. We are asked if we could shed any light on how much (roughly) compensation to the landlord would be to extend the lease by a further 90 years. Identical properties in Barnsbury with 100 year plus lease were worth £181,600. The mid-range amount of ground rent was £55 invoiced annually. The lease came to a finish in 2076. Given that there were 52 years as a residual term we calculated the compensation to the freeholder for the lease extension to be between £30,400 and £35,200 exclusive of legals.
An example of a Lease Extension matter before the tribunal for a Barnsbury property is Flat 120, Clare Court Judd Street in August 2013. the Tribunal held that the premium to be paid for the extension of the lease should be £64,650 This case was in relation to 1 flat. The unexpired lease term was 62.79 years.