Unfortunately that a Harlington residential lease is a wasting asset. The lease value drops in proportion to its lease length. The extent of this is taken for granted in the early years due to the loss of value being disguised by increases in the Harlington property market.Where your lease has approximately ninety years left, 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 dips below eighty years - otherwise a higher premium will be due. Most flat owners in Harlington will be able to extend under the legislation; however a conveyancer should be able to confirm whether you are eligibility. In some cases you may not qualify. There are also strict timetables and procedures to follow once the process is initiated and you will need to be guided by your lawyer throughout the process.
It is generally accepted that a residential leasehold with in excess of one hundred years unexpired lease term is worth roughly the equivalent as a freehold. Where an additional ninety years added to all but the shortest lease, the property will be worth the same as a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| 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. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 75 years plus the term of the mortgage at the outset 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. |
| Skipton Building Society | 85 years from the date of completion of the mortgage For Buy to Let cases: - lettings must not breach any of the lessee’s covenants; and - consent of the lessor to lettings must be obtained if necessary |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
The conveyancers that we work with procure Harlington 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.
Last October Gabriel, started to get close to the 80-year mark with the lease on his ground floor flat in Harlington. In buying his property 18 years ago, the length of the lease was of little relevance. Fortunately, he realised he would soon be paying an escalated premium for a lease extension. Gabriel arranged for a lease extension at the eleventh hour in September. Gabriel and the landlord who owned the flat above eventually agreed on sum of £6,000 . If the lease had dropped lower than eighty years, the premium would have escalated by at least £1,125.
Last Summer we were e-mailed by Mr and Mrs. Y Harris , who owned a first floor flat in Harlington in June 2012. The dilemma was if we could shed any light on how much (roughly) premium would likely be for a ninety year lease extension. Similar residencies in Harlington with an extended lease were in the region of £285,000. The mid-range ground rent payable was £55 collected annually. The lease concluded in 2105. Given that there were 79 years unexpired we calculated the premium to the freeholder for the lease extension to be between £13,300 and £15,400 not including legals.
An example of a Freehold Enfranchisement case for a Harlington property is 164 Nestles Avenue in October 2013. The tribunal agreed with the proposed price of £20,158 for the freehold and determined that that sum is the amount to be paid into court This case was in relation to 2 flats. The remaining number of years on the lease was 69 years.