Unfortunately that a Harefield residential lease is a deteriorating asset. The lease value reduces in proportion to its lease length. The extent of this is taken for granted in the early years due to the reduction being disguised by increases in the Harefield property market.Once your lease gets to 85ish years, you need to start thinking about a lease extension. If the number of years remaining drops below 80 years, you will end up paying 50% 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 additional value that a lease extension will add the property Most leasehold owners in Harefield will be able to extend under the legislation; however a lawyer will be able to confirm whether you qualify for an extension. In some cases you may not qualify. There are also strict timeframes and procedures to follow once the process is initiated and you will need to be guided by your lawyer throughout the formalities.
It is generally considered that a residential leasehold with over one hundred years unexpired lease term is worth roughly the same as a freehold. Where an additional ninety years added to any lease with more than 30 years remaining, the property will be worth the same as a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage are not acceptable. 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; |
| 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
Retaining our service gives you better control over the value of your Harefield leasehold, as your property will be more valuable and marketable in respect of lease length should you wish to sell. The lawyers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Last October George, started to get near to the 80-year mark with the lease on his first floor apartment in Harefield. In buying his home 18 years previously, the unexpired term was of no bearing. Fortunately, he became aware that he would imminently be paying an inflated amount for a lease extension. George extended the lease just under the wire last May. George and the freeholder via the managing agents subsequently agreed on a premium of £5,500 . If he not met the deadline, the premium would have become more exhorbitant by a minimum £950.
Last Spring we were approach by Mr P Bonnet , who was assigned a lease of a newly refurbished apartment in Harefield in September 1996. We are asked if we could approximate the premium could be for a ninety year extension to my lease. Comparative homes in Harefield with an extended lease were valued about £290,000. The average amount of ground rent was £45 collected yearly. The lease came to a finish on 17 September 2099. Taking into account 73 years as a residual term we estimated the premium to the freeholder to extend the lease to be within £9,500 and £11,000 not including legals.
An example of a Lease Extension matter before the tribunal for a Harefield residence is Flats 8, 11 and 15 Craigmore Court 46 Murray Road in December 2013. The tribunal held that the price payable by the Applicant tenant of Flat 8 to acquire an extended lease shall be £26,438 plus £1 to the intermediate lessee . The tribunal held that the price payable by the Applicant tenants of Flat 11 to acquire an extended lease shall be £26,791 plus £1 to the intermediate lessee. The tribunal held that the price payable by the Applicant tenant of Flat 15 to acquire an extended lease shall be £26,638 plus £1 to the intermediate lessee . This case related to 3 flats. The number of years remaining on the existing lease(s) was 71 years.