When it comes to domestic leasehold premises in Harlow, you are actually buying a right to live in a property for a set period of time. In recent years flat leases are usually granted for 99 years or 125. Many leasehold owners become complacent as this seems like a lengthy period of time, you may think about a lease extension sooner as opposed to later. Accepted thinking is that the shorter the lease is the cost of extending the lease increases markedly particularly once there are less than 80 years left. Leasehold owners in Harlow with a lease drawing near to 81 years left should seriously consider extending it as soon as possible. Once a lease has under eighty years left, under the relevant Act the freeholder can calculate and levy a greater amount, assessed on a technical calculation, strangely termed as “marriage value” which is payable.
Leasehold properties in Harlow with more than one hundred years remaining 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 freehold unless savings on ground rent and estate charges warrant 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; |
| Chelsea 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. |
| Godiva Mortgages | 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. |
| 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. |
| 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 |
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 respect of lease length should you want to sell. The conveyancers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
During the course of the last few months Stanley, started to get near to the 80-year mark with the lease on his two bedroom apartment in Harlow. Having bought his property two decades ago, the length of the lease was of no bearing. As luck would have it, he realised he needed to take steps soon on Extending the lease. Stanley was able to extend his lease just in the nick of time in July. Stanley and the landlord who owned the flat above subsequently agreed on the final figure of £6,000 . If the lease had slid lower than eighty years, the figure would have become more exhorbitant by a minimum £1,125.
Mr and Mrs. Y Ramírez was assigned a lease of a one bedroom apartment in Harlow in March 2004. The dilemma was if we could shed any light on how much (roughly) price would be for a ninety year lease extension. Identical properties in Harlow with 100 year plus lease were in the region of £168,800. The average amount of ground rent was £60 collected monthly. The lease terminated on 2 August 2080. Given that there were 55 years unexpired we calculated the compensation to the freeholder for the lease extension to be between £31,400 and £36,200 plus legals.
Mr and Mrs. R Roberts owned a newly refurbished apartment in Harlow in March 1996. The dilemma was if we could estimate the premium would be to prolong the lease by an additional years. Comparable properties in Harlow with an extended lease were valued about £235,200. The mid-range amount of ground rent was £45 billed per annum. The lease concluded on 15 July 2091. Given that there were 66 years unexpired we approximated the compensation to the freeholder for the lease extension to be between £12,400 and £14,200 plus costs.