It’s an underpublicised certainty that a Barnsbury residential lease is a deteriorating 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 Barnsbury property prices.Once your lease gets to 85ish years, you should start thinking about a lease extension. If lease term slips below eighty years, you will end up paying 50% of the property's 'marriage value' in addition to 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 Most leasehold owners in Barnsbury will be able to extend under the legislation; however a conveyancer should be able to confirm whether you are eligibility. In some cases you may not qualify. There are also strict deadlines 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.
Leasehold premises in Barnsbury with over one hundred years outstanding on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your premises. In such circumstances there is often little to be gained by buying the freehold unless savings on ground rent and maintenance charges merit 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. |
| 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; |
| 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. |
| 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
Regardless of whether you are a tenant or a freeholder in Barnsbury,the lease extension experts that we work with will always be willing to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with Barnsbury valuers.
Finley was the the leasehold proprietor of a high value apartment in Barnsbury on the market with a lease of just over fifty eight years outstanding. Finley informally contacted his freeholder being a well known local-based freehold company for a lease extension. The freeholder indicated a willingness to extend the lease to 125 years on the basis of a rise in the rent to £200 per annum. Ordinarily, ground rent would not be due on a lease extension were Finley to invoke his statutory right. Finley obtained expert advice and was able to make a more informed judgement and deal with the matter and ending up with a market value flat.
In 2009 we were phoned by Ms K Richardson who, having bought a purpose-built flat in Barnsbury in July 2005. We are asked if we could shed any light on how much (approximately) premium would likely be for a ninety year extension to my lease. Identical residencies in Barnsbury with a long lease were valued about £205,000. The mid-range amount of ground rent was £50 invoiced yearly. The lease lapsed in 2104. Taking into account 79 years outstanding we estimated the premium to the freeholder for the lease extension to be within £8,600 and £9,800 plus professional charges.
An example of a Lease Extension decision for a Barnsbury property 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 remaining number of years on the lease was 62.79 years.