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
Leasehold premises in Harlow with more than one hundred years outstanding on the lease are often regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your property. In such circumstances there is often little to be gained by purchasing the reversionary interest unless savings on ground rent and estate charges merit it.
| Lender | Requirement |
|---|---|
| Accord Mortgages | 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. |
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| 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; |
| National Westminster Bank | Mortgage term plus 30 years. |
| 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 |
Retaining our service gives you increased control over the value of your Harlow leasehold, as your property will be more valuable and saleable in respect of lease length should you decide to sell. The lawyers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Following lengthy discussions with the freeholder of her studio flat in Harlow, Bethan commenced the lease extension process just as her lease was approaching the all-important eighty-year deadline. The legal work was concluded in February 2011. The freeholder’s costs were kept to an absolute minimum.
Last Winter we were e-mailed by Mrs P Kelly , who completed a first floor flat in Harlow in April 2001. We are asked if we could estimate the premium would be to extend the lease by an additional years. Comparable properties in Harlow with 100 year plus lease were valued about £246,800. The average ground rent payable was £60 collected per annum. The lease came to a finish in 2075. Considering the 50 years unexpired we approximated the premium to the landlord to extend the lease to be within £44,700 and £51,600 not including fees.
Last Summer we were contacted by Mr and Mrs. F Ricardo , who moved into a one bedroom flat in Harlow in November 2005. The question was if we could shed any light on how much (roughly) compensation to the landlord would be to prolong the lease by a further 90 years. Similar homes in Harlow with a long lease were in the region of £208,200. The mid-range ground rent payable was £65 collected yearly. The lease finished in 2086. Having 61 years left we calculated the compensation to the freeholder for the lease extension to be within £20,000 and £23,000 plus legals.