The value of Harlow leasehold residential property falls as the lease term becomes shorter and this will have an impact on its saleability. The expense of extending the lease can increase substantially once the remaining term is less than 80 years
It is generally accepted that a residential leasehold with over one hundred years unexpired lease term is worth roughly the equivalent as a freehold. Where an additional 90 years added to all but the shortest lease, the residence will be equivalent in value to a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage are not acceptable. 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; |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
| 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 Harlow leasehold, as your property will be more valuable and saleable in terms of lease length should you decide to sell. The conveyancers that we work with have a wealth of experience of handling many hundreds of lease extensions or freehold purchase transactions.
John was the the leasehold owner of a conversion flat in Harlow being marketed with a lease of a few days over 72 years left. John informally spoke with his freeholder being a well known Manchester-based freehold company for a lease extension. The freeholder indicated a willingness to grant an extension taking the lease to 125 years on the basis of an increased rent to £100 yearly. Ordinarily, ground rent would not be due on a lease extension were John to invoke his statutory right. John obtained expert legal guidance and was able to make a more informed judgement and handle with the matter and readily saleable.
In 2009 we were called by Mr and Mrs. C Bennett who, having completed a one bedroom flat in Harlow in October 2010. We are asked if we could shed any light on how much (approximately) price would likely be for a ninety year lease extension. Identical premises in Harlow with 100 year plus lease were valued about £210,600. The average amount of ground rent was £45 invoiced annually. The lease came to a finish on 5 May 2088. Having 62 years remaining we calculated the premium to the freeholder to extend the lease to be within £18,100 and £20,800 not including expenses.
Last Autumn we were phoned by Dr M Morel , who completed a recently refurbished apartment in Harlow in July 2001. We are asked if we could approximate the premium could be for a ninety year lease extension. Identical homes in Harlow with an extended lease were worth £265,000. The average ground rent payable was £50 billed quarterly. The lease end date was in 2099. Having 73 years unexpired we approximated the premium to the freeholder for the lease extension to be between £9,500 and £11,000 exclusive of expenses.