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 a lease extension can escalate substantially once the remaining term is less than 80 years
Leasehold premises in Harlow with over one hundred years outstanding 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 situations there is often little upside in purchasing the reversionary interest unless savings on ground rent and maintenance charges warrant it.
| Lender | Requirement |
|---|---|
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 30 years plus the term of the mortgage at the outset 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. |
Using our service will provide you increased control over the value of your Harlow leasehold, as your property will be more valuable and marketable in terms of lease length should you wish to sell. The conveyancing solicitors that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Sebastian owned a 2 bedroom flat in Harlow being marketed with a lease of just over 59 years unexpired. Sebastian informally approached his freeholder a well known local-based freehold company and enquired on a premium to extend the lease. The landlord indicated a willingness to grant an extension taking the lease to 125 years subject to a new rent initially set at £200 per annum and doubled every twenty five years thereafter. No ground rent would be due on a lease extension were Sebastian to invoke his statutory right. Sebastian procured expert legal guidance and secured an acceptable resolution without resorting to tribunal and ending up with a market value flat.
In 2010 we were approached by Mr and Mrs. K Thompson who, having acquired a one bedroom apartment in Harlow in October 1995. We are asked if we could estimate the compensation to the landlord would likely be to prolong the lease by an additional years. Comparable premises in Harlow with 100 year plus lease were in the region of £250,000. The mid-range ground rent payable was £50 billed annually. The lease termination date was in 2095. Having 69 years remaining we approximated the premium to the freeholder for the lease extension to be between £9,500 and £11,000 exclusive of fees.
Last month we were e-mailed by Mr F Johnson , who owned a purpose-built flat in Harlow in July 2005. The dilemma was if we could shed any light on how much (approximately) premium would likely be to extend the lease by 90 years. Comparable homes in Harlow with 100 year plus lease were valued about £285,000. The mid-range amount of ground rent was £55 collected annually. The lease elapsed in 2106. Having 80 years left we approximated the compensation to the freeholder to extend the lease to be within £12,400 and £14,200 plus expenses.