The last issue of the magazine celebrated the Barbican at 50. The excellent opening article gave me pause to reminisce on the many happy years we spent in Willoughby and Speed. As I frequently visit the Barbican, happily wandering down memory lane on the highwalks, I don’t actually feel as though I’ve left. In fact the entrance buzzer in Speed still bears our name!
Among the highlights of our time in the Barbican was my wife, Nina’s birthday party held on Speed Lawn with some 80 or so friends, family members and neighbours in attendance. Kebabs were delivered by the Mangal in Dalston, the wine flowed, a klezmer duo provided the entertainment and the summer sun did indeed shine. It was probably just as well we only found out after the event that such use of the gardens was not permitted. A good time was nonetheless had by all and I’m coping quite well with the guilt feelings!
At a reception in the conservatory some years ago I was fortunate enough to speak to the daughter, I forget which, of Chamberlain, Bon or Powell, the revered architects of our concrete paradise. I spoke to her about our delight at living on the estate and our gratitude to the architects for the superb job they had done. The architecture aside, it was above all the sense of living in a community, a village almost that made living here so wonderful. Belonging to several of the clubs, associations and societies we had got to know so many interesting and kind people. This meant it was and probably still is impossible to nip out to Waitrose for a few items of shopping without coming across someone you know and with whom you end up chatting for half an hour. Nipping out came to be viewed more of an excursion of indeterminate length rather than a 10 minute sliver of your morning.
All of this reminiscing about happy times spent in the Barbican not so long ago brings me to thoughts about how the passing of time is eroding your lease. With the Barbican just having celebrated its 50th birthday and the leaseholds set at 125 years, the properties on the estate will have leases with around 75 years left to run. This figure is important as when the remaining term of a lease drops below 80 years, the value of your property starts to drop. This can in turn mean that a potential buyer of your flat will have a problem getting a mortgage, and so you are therefore limiting the pool of potential buyers.
A number of residents have already addressed this by extending their lease. The reasons for doing this may seem obvious but given there are costs involved, it may be that for some it isn’t in fact an issue. If you have no children, or none that you particularly like, and have no intention of moving away from God’s own urban development, it could seem a waste of money. Why bother? Another 75 years would probably do you after all. It’s not too controversial to say that such instances are likely to be rare.
If for any reason this is something you have put on the back-burner it is worth your while putting it on the front-burner. The reason for this is that the longer you put off extending the lease, or technically putting in place a replacement lease with an increased term, the more costly it gets. This is because when the premium due is calculated, it reflects what is called the marriage value of the property. This is the difference between the value of the property with a long lease and the value without. This increase in value is split equitably between the landlord and the leaseholder, although it is calculated by means of a complex formula, which is designed to ensure fairness to each side. The key point here is that with a lease longer than 80 years, no marriage value is payable.
The Barbican Estate Office has put a simple process in place enabling you to extend your current lease by 90 years effectively. This has to be your first port of call, as managing the process via your own solicitor is likely to be substantially more expensive. The Estate Office will be happy to explain the process to you in detail and to give guidance as to the costs involved. They will also set out the limitations of any advice they provide. One point to bear in mind is that if you have recently bought your flat you may need to wait two years from the purchase date before you can apply to have a new lease. It is worth checking if your vendor has started the ball rolling, as this will reduce the waiting period.
The value of your property is likely to form an important part of your estate planning and as financial advisers this is an area in which we often get involved. I would however stress however that we are not legal specialists so no part of this article should be construed as legal advice.
Rather than end on a downbeat, how about a competition to test your knowledge of English literature? Embedded in this article is a literary reference. You may be able to spot it but where exactly is the original quotation upon which it is based to be found?
The first person with the correct answer will win lunch with yours truly at Club Gascon. For reasons of fair play the competition winner will be someone not already known to me.