The re-sale value of a leasehold property in South Harrow is impacted by how long the lease has left to run. If it is close to or less than eighty years you should expect problems on re-sale, so it is advisable to arrange for a lease extension ahead of buying. It is preferable to start the lease extension process when the lease still has 82 years remaining so that formalities can be finalised ahead of the eighty year cut off point. Leasehold Reform legislation enables South Harrow qualifying lessees to a ninety year extension added to their residual lease term (ie if your lease has 50 years left the statutory lease extension will provide a new term of 140 years). The reason of the valuation is to determine the amount payable by the lessee to the freeholder for the purchase of the lease extension.
Leasehold residencies in South Harrow with over one hundred years left on the lease are often regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your home. In such circumstances there is often little upside in purchasing the reversionary interest unless savings on ground rent and service charges merit it.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Santander | You must report the unexpired lease term to us and await our instructions if: 1. the unexpired term assumed by our valuer is between 55 and 82 years, but the actual unexpired term differs by more than one year (whether longer or shorter); or 2. the unexpired term assumed by our valuer is more than 82 years but the actual unexpired term is less than 82 years; or 3. no valuation report is provided However, we will not accept a lease where on expiry of the mortgage: (i) less than 50 years remain and all or part of the loan is repaid on an interest-only basis: or (ii) less than 30 years remain and the loan is repaid on a capital and interest basis We will accept a lease that has been extended under the provisions of the Leasehold Reform Act 1993 provided statutory compensation would be available to the leaseholder. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
Retaining our service will provide you enhanced control over the value of your South Harrow leasehold, as your property will be more valuable and saleable in relation to the lease length should you wish to sell. The conveyancers that we work with have a wealth of experience of handling many hundreds of lease extensions or freehold purchase transactions.
Aarav owned a conversion flat in South Harrow on the market with a lease of a few days over fifty eight years unexpired. Aarav on an informal basis contacted his freeholder being a well known Bristol-based freehold company for a lease extension. The freeholder indicated a willingness to grant an extension taking the lease to 125 years subject to a new rent at the outset set at £200 per annum and increase every twenty five years thereafter. Ordinarily, ground rent would not be payable on a lease extension were Aarav to exercise his statutory right. Aarav procured expert legal guidance and secured an acceptable resolution informally and readily saleable.
In 2009 we were e-mailed by Mr and Mrs. K Smith who, having completed a ground floor apartment in South Harrow in July 2011. We are asked if we could estimate the premium would be to prolong the lease by ninety years. Identical homes in South Harrow with a long lease were valued around £220,400. The average amount of ground rent was £45 invoiced quarterly. The lease terminated on 18 June 2090. Considering the 64 years as a residual term we estimated the premium to the landlord to extend the lease to be between £15,200 and £17,600 not including expenses.
An example of a Lease Extension decision for a South Harrow property 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 term as at the valuation date was 79 years.