Unfortunately that a Harleston residential lease is a deteriorating asset. The lease value drops in proportion to its lease length. The extent of this is not fully appreciated in the early years due to the reduction being disguised by increases in the Harleston property market.Once your lease gets to 85ish years, you need to start thinking about a lease extension. An important point to note is that it is desirable for lease extension to take place before the term of the existing lease slips below eighty years - otherwise a higher premium will be due. Most leasehold owners in Harleston will be able to extend under the legislation; however a conveyancer will be able to confirm whether you qualify for an extension. In some situations you may not qualify. There are also strict timeframes and procedures to follow once the process has commenced and you will need to be guided by your conveyancing solicitor from beginning to end of the formalities.
Leasehold premises in Harleston with more than 100 years remaining 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 premises. In such situations there is often little upside in buying the freehold unless savings on ground rent and estate charges justify it.
| Lender | Requirement |
|---|---|
| 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; |
| Godiva Mortgages | 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. |
| National Westminster Bank | Mortgage term plus 30 years. |
| Yorkshire 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. |
Irrespective of whether you are a tenant or a freeholder in Harleston,the lease extension lawyers that we work with will always be happy to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Harleston valuers.
Off the back of protracted negotiations with the landlord of her leasehold flat in Harleston, Katherine commenced the lease extension process just as the lease was approaching the all-important eighty-year mark. The legal work was finalised in May 2012. The landlord’s fees were kept to an absolute minimum.
In 2009 we were approached by Dr J García who, having purchased a studio apartment in Harleston in February 1999. We are asked if we could shed any light on how much (roughly) premium would be for a 90 year extension to my lease. Comparative properties in Harleston with an extended lease were worth £176,200. The mid-range amount of ground rent was £65 collected annually. The lease elapsed on 16 November 2081. Having 56 years left we calculated the premium to the landlord to extend the lease to be between £29,500 and £34,000 plus expenses.
In 2009 we were contacted by Mr and Mrs. L Richardson who, having took over the lease of a first floor apartment in Harleston in May 2007. We are asked if we could estimate the premium would likely be for a ninety year lease extension. Comparable residencies in Harleston with a long lease were worth £242,600. The average ground rent payable was £45 billed quarterly. The lease expired on 7 February 2092. Having 67 years remaining we calculated the premium to the landlord for the lease extension to be between £11,400 and £13,200 not including legals.