South Harrow leases on residential properties are gradually losing value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of your lease becomes more expensive. It is the case that most South Harrow tenants have the right to extend their lease by an additional 90 years under the 1993 Leasehold Reform Act. Where you are a leasehold owner in South Harrow you should see if your lease has between seventy and 90 years remaining. In particular once the remaining lease term slips under 80 years, the premium due on any lease extension increases dramatically as part of the premium you pay is what is known as a marriage value
Leasehold premises in South Harrow with in excess of one hundred years remaining on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your home. In such situations there is often little upside in purchasing the freehold unless savings on ground rent and estate charges justify it.
| Lender | Requirement |
|---|---|
| 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. |
| 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
The lawyers that we work with handle South Harrow 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.
Jamie was the the leasehold proprietor of a conversion apartment in South Harrow on the market with a lease of a few days over 61 years unexpired. Jamie informally approached his landlord being a well known local-based freehold company and enquired on a premium to extend the lease. The landlord was prepared to give an extension on non-statutory terms taking the lease to 125 years on the basis of a rise in the rent to £200 per annum. No ground rent would be due on a lease extension were Jamie to invoke his statutory right. Jamie obtained expert advice and secured an acceptable resolution without resorting to tribunal and ending up with a market value flat.
In 2010 we were phoned by Mr K Lefèvre who, having owned a one bedroom flat in South Harrow in August 2004. The question was if we could estimate the premium could be to prolong the lease by ninety years. Comparable homes in South Harrow with a long lease were valued around £232,800. The mid-range amount of ground rent was £45 invoiced monthly. The lease terminated in 2091. Taking into account 65 years unexpired we approximated the compensation to the landlord to extend the lease to be between £13,300 and £15,400 not including legals.
An example of a Lease Extension matter before the tribunal for a South Harrow flat is GFF 1 Holyrood Avenue in May 2014. The Tenant wished to acquire a new (extended) lease and applied to the Willesden County Court who granted a vesting order on 20* March2013. The Tribunal decied that the premium to be paid was £9,062 This case related to 1 flat. The unexpired lease term was 79 years.