Harrow leases on residential properties are gradually decreasing in value. The shorter the remaining lease term becomes, the less it is worth – and accordingly any extension of the lease becomes more expensive. Legislation has been in place for sometime now which permits qualifying Harrow residential leaseholders to extend the terms of long leases. Where you are a leasehold owner in Harrow you should see if your lease has between seventy and 90 years left. In particular once the remaining lease term slips under 80 years, the cost of any lease extension sharply increases as part of the premium you pay is what is known as a marriage value
It is conventional wisdom that a residential leasehold with more than 100 years unexpired lease term is worth approximately the equivalent as a freehold. Where an further ninety years added to any lease with more than 45 years remaining, the residence will be equivalent in value to a freehold for many years in the future.
| 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. |
| 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. |
| 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 |
| 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. |
Regardless of whether you are a tenant or a freeholder in Harrow,the lease extension solicitors that we work with will always be happy to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with Harrow valuers.
In 2014 Luke, came very near to the eighty-year mark with the lease on his leasehold flat in Harrow. In buying his flat twenty years ago, the lease term was of little concern. Thankfully, he became aware that he needed to take steps soon on Extending the lease. Luke arranged for a lease extension just under the wire in March. Luke and the freeholder via the management company eventually settled on an amount of £6,000 . If the lease had dropped lower than eighty years, the premium would have gone up by a minimum £1,125.
In 2013 we were phoned by Dr C Collins who, having acquired a one bedroom flat in Harrow in June 1997. We are asked if we could approximate the compensation to the landlord could be to prolong the lease by 90 years. Comparative homes in Harrow with 100 year plus lease were worth £208,600. The average amount of ground rent was £60 collected yearly. The lease finished on 7 July 2083. Having 57 years remaining we estimated the compensation to the landlord for the lease extension to be between £30,400 and £35,200 plus fees.
An example of a Lease Extension decision for a Harrow premises is flat 93b Welldon Crescent in May 2009. The Tribunals valuation for a 90-year lease extension of this fat was £13,171 This case was in relation to 1 flat. The remaining number of years on the lease was 75.25 years.