It’s a harsh truth that a New Barnet residential lease is a deteriorating asset. The lease value drops in proportion to its lease length. The extent of this is taken for granted in the early years due to the deflation being disguised by increases in the New Barnet property market.Once your lease nears 85ish years, you should start considering a lease extension. If the number of years remaining slips below 80 years, you will then be required to pay half of the property's 'marriage value' on top of the usual cost of the lease extension to the landlord. The marriage fee is the amount of extra value that a lease extension will add the property Most flat owners in New Barnet will be able to extend under the legislation; however a lawyer will be able to confirm if you qualify for an extension. In some cases you may not qualify. There are also strict timetables and procedures to be adhered to once the process has commenced and you will need to be guided by your conveyancing solicitor from beginning to end of the formalities.
Leasehold residencies in New Barnet with over one hundred years outstanding on the lease are often referred to as ‘virtual freehold’. This is where the lease value 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 service 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; |
| 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
Lease extensions in New Barnet can be a difficult process. We recommend you get guidance from a conveyancing solicitor and valuer well versed in the legislation and lease extension process.
We provide you with an expert from a selection of lease extension solicitors, which ensures a targeted and efficient service as you have a dedicated port of call with an individual lawyer. Our lease extension solicitors have a wealth of experience dealing with New Barnet lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
In the wake of 6 months of protracted negotiations with the landlord of her one bedroom flat in New Barnet, Amy started the lease extension process as the eighty year deadline was swiftly advancing. The lease extension was finalised in July 2014. The freeholder’s fees were restricted to a tad over 450 pounds.
Last Christmas we were contacted by Mrs Chloe Morris , who owned a studio flat in New Barnet in May 1995. The question was if we could approximate the compensation to the landlord could be for a ninety year extension to my lease. Identical properties in New Barnet with a long lease were valued around £208,200. The average ground rent payable was £65 invoiced quarterly. The lease expired on 25 August 2086. Taking into account 61 years outstanding we estimated the premium to the freeholder for the lease extension to be within £20,000 and £23,000 exclusive of legals.
An example of a Lease Extension case for a New Barnet flat 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 was in relation to 1 flat. The number of years remaining on the existing lease(s) was 76 years.