Unfortunately that a Barrow In Furness 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 early years due to the depreciation being disguised by increases in the Barrow In Furness property market.Once your lease gets to 85ish years, you need to 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' on top of the usual cost of the lease extension to the landlord. The marriage fee is the amount of additional value that a lease extension will add the property The majority of leasehold owners in Barrow In Furness will be able to extend under the legislation; however a conveyancing solicitor should be able to confirm if you qualify for an extension. In some situations you may not be entitled. There are also strict deadlines and procedures to follow once the process is instigated and you will need to be guided by your lawyer from beginning to end of the process.
Leasehold properties in Barrow In Furness with over one hundred years remaining on the lease are often referred to as ‘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 purchasing the reversionary interest unless savings on ground rent and maintenance 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; |
| 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. |
| 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. |
| Skipton Building Society | 85 years from the date of completion of the mortgage For Buy to Let cases: - lettings must not breach any of the lessee’s covenants; and - consent of the lessor to lettings must be obtained if necessary |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
Regardless of whether you are a tenant or a landlord in Barrow In Furness,the lease extension lawyers that we work with will always be willing to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Barrow In Furness valuers.
Half a year ago Zachary, came seriously close to the 80-year threshold with the lease on his garden apartment in Barrow In Furness. In buying his property two decades ago, the length of the lease was of little bearing. Fortunately, it dawned on him that he needed to take action soon on a lease extension. Zachary extended the lease at the eleventh hour last January. Zachary and the landlord ultimately agreed on an amount of £5,500 . If he failed to meet the deadline, the figure would have become more costly by at least £950.
In 2014 we were called by Mr and Mrs. M Simon who, having purchased a garden apartment in Barrow In Furness in February 2006. The question was if we could estimate the price would be for a ninety year extension to my lease. Comparative residencies in Barrow In Furness with a long lease were worth £265,000. The mid-range ground rent payable was £50 billed yearly. The lease lapsed on 15 September 2098. Having 73 years left we calculated the compensation to the landlord for the lease extension to be within £9,500 and £11,000 not including legals.
Last Winter we were contacted by Mr and Mrs. K Howard , who owned a newly refurbished apartment in Barrow In Furness in August 2012. We are asked if we could shed any light on how much (approximately) premium could be to extend the lease by 90 years. Identical homes in Barrow In Furness with an extended lease were valued around £264,000. The average amount of ground rent was £60 collected annually. The lease finished in 2078. Given that there were 53 years outstanding we calculated the premium to the landlord to extend the lease to be between £37,100 and £42,800 not including costs.