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Why you should commence your Harrold lease extension


Main reasons to commence your Harrold lease extension today:

A Harrold leasehold property depreciates with the years remaining on the lease.

With a residential leasehold property in Harrold, you are in fact renting it for a certain period of time. These days flat leases are usually granted for 99 years or 125. Even though this may appear like a lengthy period of time, you may think about a lease extension sooner rather than later. The general rule is that the shorter the number of years is the cost of extending the lease gets disproportionately greater notably once there are fewer than eighty years remaining. Anyone in Harrold with a lease nearing 81 years remaining should seriously consider extending it sooner rather than later. Once a lease has less than 80 years left, under the relevant Act the freeholder can calculate and charge a greater premium, assessed on a technical multiplication, known as “marriage value” which is payable.

An extended lease has roughly the same value as a freehold

Leasehold residencies in Harrold with over one hundred years left on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your property. In such situations there is often little upside in buying the reversionary interest unless savings on ground rent and maintenance charges merit it.

Lending institutions may decide not to finance a property with a short lease

Lending institutions have specific criteria when loaning funds charged on leasehold homes. Some will simply refrain from lending at all once an unexpired lease term falls under a certain unexpired lease term. Many Lending institutions will not regard property with a remaining term of less than seventy years suitable security. As well as this being important when selling, it is also relevant if you are intending to refinance your Harrold home.

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 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;
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.
National Westminster Bank Mortgage term plus 30 years.
TSB Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption.

What makes us experts in Harrold lease extensions?

Lease extensions in Harrold can be a difficult process. We recommend you get guidance from a lawyer and valuer with experience in this area.

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 in-depth market knowledge dealing with Harrold lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.

Harrold Lease Extension Case Studies:

Edward, Harrold, Bedfordshire,

Edward owned a 2 bedroom flat in Harrold on the market with a lease of a little over 59 years outstanding. Edward on an informal basis approached his freeholder being a well known London-based freehold company for a lease extension. The landlord indicated a willingness to grant an extension taking the lease to 125 years subject to a rise in the rent to £100 per annum. Ordinarily, ground rent would not be payable on a lease extension were Edward to exercise his statutory right. Edward obtained expert advice and secured an acceptable resolution informally and ending up with a market value flat.

Harrold case:

Mr and Mrs. A Campbell owned a ground floor apartment in Harrold in November 2001. We are asked if we could shed any light on how much (roughly) price would be to extend the lease by ninety years. Similar flats in Harrold with 100 year plus lease were in the region of £176,200. The average ground rent payable was £65 collected yearly. The lease end date was in 2081. Having 56 years as a residual term we calculated the premium to the landlord to extend the lease to be within £29,500 and £34,000 plus costs.

Harrold case:

Mr Felix Williams purchased a first floor flat in Harrold in May 2011. The question was if we could approximate the price would likely be for a ninety year extension to my lease. Similar premises in Harrold with a long lease were valued around £237,600. The mid-range ground rent payable was £45 billed every twelve months. The lease elapsed in 2092. Considering the 67 years remaining we estimated the compensation to the freeholder for the lease extension to be between £11,400 and £13,200 not including legals.