The value of Harlington leasehold residential property falls as the lease term becomes shorter and this will have an impact on its saleability. The cost of a lease extension can increase significantly once the remaining term is less than 80 years
Leasehold residencies in Harlington with more than 100 years left on the lease are often regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your premises. In such circumstances there is often little to be gained by buying the freehold unless savings on ground rent and service 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; |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. |
| 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. |
| 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. |
Retaining our service gives you enhanced control over the value of your Harlington leasehold, as your property will be more valuable and marketable in respect of lease length should you decide to sell. The conveyancing solicitors that we work with have a in-depth market knowledge handling many hundreds of lease extensions or freehold purchase transactions.
During the course of the last few months Alfie, started to get close to the eighty-year threshold with the lease on his garden flat in Harlington. In buying his flat twenty years ago, the length of the lease was of no bearing. Thankfully, it dawned on him that he needed to take steps soon on Extending the lease. Alfie extended the lease just under the wire in August. Alfie and the freeholder in the end agreed on sum of £5,000 . If he not met the deadline, the price would have gone up by a minimum £1,075.
In 2012 we were phoned by Ms Jessica Mitchell who, having was assigned a lease of a garden flat in Harlington in April 2003. We are asked if we could estimate the compensation to the landlord would be for a ninety year extension to my lease. Similar premises in Harlington with 100 year plus lease were worth £186,000. The average amount of ground rent was £65 collected per annum. The lease concluded on 17 September 2083. Given that there were 58 years as a residual term we calculated the compensation to the freeholder for the lease extension to be within £23,800 and £27,400 not including fees.
An example of a Freehold Enfranchisement matter before the tribunal for a Harlington premises 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 affected 2 flats. The remaining number of years on the lease was 69 years.