It’s a harsh truth that a Friern Barnet residential lease is a deteriorating asset. As the lease term diminishes so does the value of the property. The extent of this is not fully appreciated in the early years due to the loss of value being disguised by increases in the Friern Barnet property prices.Where your lease has approximately ninety years left, you should start thinking about a lease extension. If lease term drops under 80 years, you will end up paying 50% of the property's 'marriage value' on top of the usual cost of the lease extension to the landlord. Marriage value is the amount of additional value that a lease extension will add the property Most flat owners in Friern Barnet will be able to extend under the legislation; however a lawyer will be able to confirm if you are eligibility. In some cases you may not be entitled. There are also strict timeframes and procedures to be adhered to once the process has commenced and you will need to be guided by your conveyancing solicitor throughout the formalities.
It is conventional wisdom that a property with over 100 years remaining is worth roughly the same as a freehold. Where an further ninety years added to all but the shortest lease, the property will be equivalent in value to a freehold for many years ahead.
| 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. |
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage are not acceptable. 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; |
| 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
The conveyancers that we work with undertake Friern Barnet 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 conveyancing solicitor we work with provide it.
Last year Zachary, came seriously close to the eighty-year mark with the lease on his studio apartment in Friern Barnet. Having bought his flat 18 years previously, the length of the lease was of minimal bearing. As luck would have it, he recognised he would soon be paying an escalated premium for a lease extension. Zachary was able to extend his lease just ahead of time in April. Zachary and the freeholder ultimately settled on sum of £5,000 . If he not met the deadline, the premium would have increased by at least £975.
In 2009 we were contacted by Dr Gabriel Bennett who, having was assigned a lease of a studio flat in Friern Barnet in October 1998. The question was if we could estimate the price would be to extend the lease by a further 90 years. Identical properties in Friern Barnet with 100 year plus lease were worth £225,400. The average ground rent payable was £45 invoiced monthly. The lease finished in 2090. Taking into account 64 years unexpired we calculated the compensation to the landlord to extend the lease to be within £15,200 and £17,600 plus fees.
An example of a Lease Extension case for a Friern Barnet premises is 34 Poplar Grove in June 2013. The Tribunal directed that the premium for the lease extension should be in the sum of £10,250. This case was in relation to 1 flat.