As the length of the unexpired term of a Harpenden residential lease diminished so does its value and therefore the value of your property. Where the residual term has, over 125 years to run then this decrease may be of little impact however there will become a stage when a lease has fewer than 80 years unexpired as part of the premium you will incur is what is termed as a marriage value. This could increase markedly the cost. It is the primary reason why you should extend the lease sooner as opposed to later. The majority of flat owners in Harpenden will meet the qualifying criteria; however a conveyancer can confirm if you qualify for a lease extension. In limited situations you may not qualify, the most common reason being that you have owned the property for under two years.
It is conventional wisdom that a property with in excess of one hundred years remaining is worth roughly the same as a freehold. Where an further 90 years added to all but the shortest lease, the property will be equivalent in value to a freehold for many years in the future.
| 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; |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| 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. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
| 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. |
Engaging our service will provide you enhanced control over the value of your Harpenden leasehold, as your property will be more valuable and marketable in terms of lease length should you decide to sell. The conveyancers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
In the wake of 6 months of lengthy discussions with the landlord of her ground floor flat in Harpenden, Sian commenced the lease extension process as the eighty year threshold was quickly advancing. The legal work was concluded in March 2008. The freeholder’s fees were negotiated to about 450 GBP.
Mrs Y Mercier moved into a one bedroom apartment in Harpenden in May 2005. We are asked if we could estimate the compensation to the landlord could be to extend the lease by 90 years. Comparative flats in Harpenden with an extended lease were valued around £181,600. The average ground rent payable was £55 collected quarterly. The lease finished on 18 August 2077. Considering the 52 years unexpired we estimated the compensation to the landlord for the lease extension to be within £30,400 and £35,200 not including professional charges.
Last Winter we were approach by Dr Ollie Bailey , who bought a newly refurbished apartment in Harpenden in March 2007. The dilemma was if we could estimate the compensation to the landlord would be to extend the lease by an additional years. Similar homes in Harpenden with a long lease were in the region of £285,000. The average ground rent payable was £45 billed annually. The lease expiry date was on 18 September 2097. Having 72 years left we approximated the premium to the landlord to extend the lease to be within £12,400 and £14,200 plus legals.