Barnsbury leases on residential properties are gradually losing value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of your lease gets more expensive. It is the case that most Barnsbury tenants have the right to extend their lease by an additional 90 years under the 1993 Leasehold Reform Act. Where you are a leasehold owner in Barnsbury you should investigate if your lease has between seventy and 90 years left. In particular once the remaining lease term slips under 80 years, the amount payable for any lease extension increases dramatically as part of the premium you will incur is what is known as a marriage value
Leasehold properties in Barnsbury with more than 100 years outstanding on the lease are often regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your home. In such situations there is often little to be gained by buying the reversionary interest unless savings on ground rent and estate charges merit it.
| 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
Engaging our service will provide you better control over the value of your Barnsbury leasehold, as your property will be more valuable and marketable in relation to the lease length should you wish to sell. The conveyancers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
After lengthy negotiations with the freeholder of her one bedroom flat in Barnsbury, Harriet initiated the lease extension process as the eighty year threshold was fast advancing. The legal work was finalised in October 2009. The freeholder’s fees were kept to an absolute minimum.
Mrs Charlotte Norbert acquired a studio apartment in Barnsbury in October 2010. The question was if we could approximate the compensation to the landlord could be for a ninety year lease extension. Similar homes in Barnsbury with a long lease were worth £290,000. The average ground rent payable was £45 invoiced every twelve months. The lease terminated in 2098. Given that there were 73 years unexpired we calculated the premium to the freeholder for the lease extension to be between £9,500 and £11,000 exclusive of legals.
An example of a Lease Extension decision 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 related to 1 flat. The unexpired lease term was 62.79 years.