The re-sale value of a leasehold property in Friern Barnet is impacted by how long the lease has remaining. If it is near to or fewer than 80 years you should anticipate problems on re-sale, so it is advisable to arrange for the lease to be extended ahead of buying. It is preferable to start the process of extending the lease is when a lease still has 82 years unexpired so that all matters can be finalised in advance of the 80 year cut off point. Statute enables Friern Barnet qualifying lessees to a 90 year extension added to their remaining lease term (ie if your lease has 50 years remaining the statutory lease extension will provide a new term of 140 years). The intention of the valuation is to arrive at an opinion of the sum payable by the lessee to the freeholder for the acquisition of the lease extension.
It is generally considered that a residential leasehold with over 100 years unexpired lease term is worth approximately the equivalent as a freehold. Where an further 90 years added to all but the shortest lease, the property will be equivalent in value to a freehold for decades to come.
| 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; |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| 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. |
| 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 |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Using our service will provide you enhanced control over the value of your Friern Barnet leasehold, as your property will be more valuable and marketable in terms of lease length should you want to sell. The conveyancers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
James was the the leasehold proprietor of a conversion flat in Friern Barnet being sold with a lease of fraction over 61 years unexpired. James on an informal basis approached his landlord being a well known Bristol-based freehold company and enquired on a premium to extend the lease. The landlord indicated a willingness to extend the lease to 125 years subject to a new rent initially set at £150 per annum and doubled every 25 years thereafter. No ground rent would be payable on a lease extension were James to exercise his statutory right. James obtained expert legal guidance and secured an acceptable deal without going to tribunal and sell the property.
Mr Harrison Walker bought a studio apartment in Friern Barnet in April 1996. The dilemma was if we could estimate the price would likely be for a ninety year lease extension. Comparative residencies in Friern Barnet with 100 year plus lease were worth £235,200. The mid-range amount of ground rent was £45 billed per annum. The lease finished on 4 January 2090. Given that there were 66 years remaining we approximated the compensation to the freeholder for the lease extension to be between £12,400 and £14,200 not including expenses.
An example of a Lease Extension decision for a Friern Barnet flat 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.