It’s a harsh truth that a Barons Court residential lease is a wasting asset. The lease value reduces in proportion to its lease length. The extent of this is not fully appreciated in the early years due to the reduction being disguised by increases in the Barons Court property market.Where your lease has approximately 90 years left, you should start thinking about a lease extension. If lease term drops under 80 years, you will then be required to pay 50% of the property's 'marriage value' in addition to the usual cost of the lease extension to the landlord. Marriage value is the amount of extra value that a lease extension will add the property The majority of flat owners in Barons Court will be able to extend under the legislation; however a conveyancer should be able to confirm if you are eligibility. In some cases you may not qualify. There are also strict timeframes and procedures to follow once the process has commenced and you will need to be guided by your lawyer for the duration of the process.
It is conventional wisdom that a residential leasehold with more than one hundred years unexpired lease term is worth roughly the equivalent as a freehold. Where an further 90 years added to any lease with more than 45 years left, the premises will be equivalent in value to a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| Santander | You must report the unexpired lease term to us and await our instructions if: 1. the unexpired term assumed by our valuer is between 55 and 82 years, but the actual unexpired term differs by more than one year (whether longer or shorter); or 2. the unexpired term assumed by our valuer is more than 82 years but the actual unexpired term is less than 82 years; or 3. no valuation report is provided However, we will not accept a lease where on expiry of the mortgage: (i) less than 50 years remain and all or part of the loan is repaid on an interest-only basis: or (ii) less than 30 years remain and the loan is repaid on a capital and interest basis We will accept a lease that has been extended under the provisions of the Leasehold Reform Act 1993 provided statutory compensation would be available to the leaseholder. |
The conveyancing solicitors that we work with procure Barons Court 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 lawyer we work with provide it.
Tommy owned a 2 bedroom apartment in Barons Court on the market with a lease of a little over fifty eight years remaining. Tommy informally spoke with his landlord being a well known local-based freehold company for a lease extension. The landlord indicated a willingness to grant an extension 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 Tommy to invoke his statutory right. Tommy procured expert advice and was able to make an informed judgement and deal with the matter and sell the property.
In 2013 we were approached by Ms J Lewis who, having was assigned a lease of a purpose-built apartment in Barons Court in March 2010. The dilemma was if we could shed any light on how much (roughly) premium would be to prolong the lease by an additional years. Identical residencies in Barons Court with a long lease were worth £181,600. The average amount of ground rent was £55 collected per annum. The lease expired on 28 April 2077. Given that there were 52 years outstanding we approximated the compensation to the freeholder to extend the lease to be within £30,400 and £35,200 exclusive of costs.
An example of a Freehold Enfranchisement matter before the tribunal for a Barons Court residence is 19 Crisp Road in June 2009. Following a vesting order (Under section 26 of the Leasehold Reform,Housing and Urban Development Act 1993) The tribunal determined that the premium payable for the acquisition of the freehold was £33,756,apportioned as to£12,285 for the lower at and £21,471for the upper fat. This case affected 2 flats. The unexpired lease term was 68.32 years.