Unfortunately that a East Barnet residential lease is a wasting asset. As the lease term reduces so does the value of the property. The extent of this is not fully appreciated in the first few years due to the reduction being disguised by increases in the East Barnet property prices.Where your lease has approximately ninety years left, you need to start thinking about a lease extension. If lease term drops under eighty years, you will end up paying half 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 extra value that a lease extension will add the property The majority of flat owners in East Barnet will be able to extend under the legislation; however a conveyancer will be able to confirm if you are eligibility. In some situations you may not qualify. There are also strict timetables and procedures to be adhered to once the process is instigated and you will need to be guided by your lawyer throughout the formalities.
Leasehold properties in East Barnet with over one hundred years outstanding on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your premises. In such circumstances there is often little upside in purchasing the freehold unless savings on ground rent and service charges justify 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. |
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| 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. |
| 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. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Engaging our service gives you enhanced control over the value of your East Barnet leasehold, as your property will be more valuable and marketable in respect of lease length should you decide to sell. The lawyers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Andrew owned a high value apartment in East Barnet on the market with a lease of fraction over fifty eight years left. Andrew on an informal basis contacted his landlord being a well known local-based freehold company for a lease extension. The freeholder was prepared to give an extension on non-statutory terms taking the lease to 125 years subject to an increased rent to £100 yearly. Ordinarily, ground rent would not be payable on a lease extension were Andrew to exercise his statutory right. Andrew obtained expert legal guidance and was able to make an informed decision and deal with the matter and ending up with a market value flat.
Mr and Mrs. F Wright bought a garden apartment in East Barnet in April 2012. We are asked if we could shed any light on how much (roughly) compensation to the landlord would likely be to prolong the lease by a further 90 years. Similar residencies in East Barnet with 100 year plus lease were worth £193,400. The mid-range amount of ground rent was £65 billed annually. The lease ran out in 2084. Considering the 59 years outstanding we approximated the premium to the landlord for the lease extension to be between £21,900 and £25,200 not including fees.
An example of a Freehold Enfranchisement matter before the tribunal for a East Barnet flat is 23 Beaconsfield Road in July 2013. The Tribunals decided that the amount payable was £31,203 for the freehold. This case was in relation to 2 flats. The unexpired lease term was 70.31 years.