The market value of a leasehold property in New Barnet depends on how long the lease has remaining. If it is near to or less than 80 years you should expect problems on re-sale, so it is advisable to arrange for a lease extension ahead of purchasing. It is ideal to start the lease extension process when the lease still has 82 years remaining so that a lease extension can be concluded prior to the eighty year cut off point. Leasehold Reform legislation entitles New Barnet qualifying lessees to a 90 year extension added to their residual lease term (ie if your lease has fifty years left the statutory lease extension will provide a new term of 140 years). The purpose of the valuation is to determine the sum payable by the lessee to the freeholder for the acquisition of the lease extension.
Leasehold residencies in New Barnet with over 100 years outstanding on the lease are often 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 upside in buying the reversionary interest unless savings on ground rent and estate charges warrant it.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
| Yorkshire 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. |
The conveyancers that we work with undertake New 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 conveyancer we work with provide it.
In recent months Matthew, started to get near to the 80-year mark with the lease on his one bedroom apartment in New Barnet. Having purchased his home twenty years previously, the unexpired term was of no interest. As luck would have it, he recognised he would imminently be paying way over the odds for Extending the lease. Matthew was able to extend his lease at the eleventh hour last January. Matthew and the freeholder subsequently agreed on a premium of £5,500 . If he failed to meet the deadline, the price would have become more costly by at least £1,050.
Mrs F White took over the lease of a one bedroom flat in New Barnet in January 2012. The question was if we could estimate the price could be for a ninety year extension to my lease. Similar premises in New Barnet with an extended lease were worth £270,000. The average ground rent payable was £55 collected annually. The lease ended in 2101. Given that there were 75 years as a residual term we calculated the compensation to the landlord to extend the lease to be within £9,500 and £11,000 exclusive of costs.
An example of a Lease Extension matter before the tribunal for a New Barnet residence is Flat 2 2 Netherfield Road in April 2010. The Tribunale held that premium payable for a 90 year extension to the existing Lease should be £7,705. This case affected 1 flat. The number of years remaining on the existing lease(s) was 76 years.