Unfortunately that a Harlow residential lease is a deteriorating asset. As the lease term diminishes so does the value of the property. The extent of this is taken for granted in the first few years due to the deflation being disguised by increases in the Harlow property prices.Where your lease has approximately ninety years left, you need to start considering a lease extension. If the number of years remaining falls below eighty years, you will end up paying half of the property's 'marriage value' in addition to the usual cost of the lease extension to the landlord. Marriage value is the amount of extra value that a lease extension will add the property Most leasehold owners in Harlow will be able to extend under the legislation; however a conveyancing solicitor will be able to clarify if you are eligibility. In some cases you may not be entitled. There are also strict timetables and procedures to be adhered to once the process has commenced and you will need to be guided by your conveyancer throughout the process.
It is generally accepted that a residential leasehold with in excess of 100 years unexpired lease term is worth roughly the same as a freehold. Where an additional 90 years added to any lease with more than 35 years unexpired, the residence will be equivalent in value to a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| Coventry Building Society | 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. |
| 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 |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| 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. |
The conveyancers that we work with procure Harlow 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.
After unsuccessful discussions with the freeholder of her garden apartment in Harlow, Catherine commenced the lease extension process just as the lease was coming close to the critical eighty-year deadline. The legal work was finalised in March 2015. The freeholder’s charges were restricted to under 450 pounds.
In 2012 we were approached by Mr Jason Turner who, having purchased a one bedroom apartment in Harlow in October 2009. The dilemma was if we could approximate the premium would be for a ninety year lease extension. Comparative properties in Harlow with an extended lease were valued about £275,000. The mid-range amount of ground rent was £55 collected yearly. The lease concluded on 18 January 2097. Having 76 years unexpired we calculated the premium to the freeholder to extend the lease to be within £9,500 and £11,000 not including expenses.
In 2010 we were called by Dr Ellie Thompson who, having acquired a one bedroom flat in Harlow in March 2002. The dilemma was if we could approximate the compensation to the landlord would likely be to prolong the lease by 90 years. Comparable premises in Harlow with an extended lease were worth £176,200. The mid-range amount of ground rent was £65 invoiced every twelve months. The lease terminated in 2077. Given that there were 56 years as a residual term we approximated the premium to the landlord for the lease extension to be between £29,500 and £34,000 plus expenses.