The rule of thumb is, all other things holding equal, the shorter the lease the more costly the premium. Qualifying leaseholders in Barnsbury have the right to extend the lease for a further 90 years in accordance with the 1993 Leasehold Reform Act. Please think carefully before delaying your Barnsbury lease extension. Postponing that expense now simply increases the premium you will eventually have to pay for a lease extension.
Leasehold residencies in Barnsbury with over one hundred years unexpired 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 situations there is often little to be gained by purchasing the freehold unless savings on ground rent and service charges justify it.
| Lender | Requirement |
|---|---|
| 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. |
| Lloyds TSB Scotland | Minimum 70 years from the date 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. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
The conveyancers that we work with procure Barnsbury 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 conveyancer we work with provide it.
In recent months Aaron, came dangerously close to the 80-year mark with the lease on his ground floor apartment in Barnsbury. Having purchased his home 18 years ago, the length of the lease was of no bearing. Fortunately, he became aware that he needed to take steps soon on a lease extension. Aaron was able to extend his lease at the eleventh hour last August. Aaron and the freeholder via the management company subsequently agreed on a premium of £6,000 . If the lease had fallen to less than 80 years, the figure would have escalated by a minimum £1,050.
Last July we were approach by Mr and Mrs. P Pérez , who completed a studio flat in Barnsbury in October 1997. The question was if we could shed any light on how much (roughly) price would likely be to extend the lease by a further 90 years. Similar homes in Barnsbury with a long lease were in the region of £260,200. The average ground rent payable was £65 invoiced every twelve months. The lease lapsed in 2091. Having 66 years left we calculated the compensation to the freeholder to extend the lease to be within £15,200 and £17,600 not including professional charges.
An example of a Lease Extension decision for a Barnsbury residence 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.