The nearer a residential lease in Harrow gets to zero years unexpired, the more it reduces the value of the property. If the residual term has, more than 125 years to run then this decrease may be of little impact that being said there will become a point in time when a lease has less than 80 years remaining as part of the premium you will incur is what is known as a marriage value. This could be significant. It is the primary reason why you should extend the lease sooner than later. Many flat owners in Harrow will meet the qualifying criteria; however a conveyancing solicitor should be able to confirm if you are eligible to extend your lease. In limited situations you may not qualify, the most common reason being that you have owned the property for less than two years.
It is generally accepted that a property with over one hundred years unexpired lease term is worth roughly the same as a freehold. Where an additional 90 years added to all but the shortest lease, the premises will be equivalent in value to a freehold for many years ahead.
| 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. |
| 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| 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. |
Engaging our service gives you better control over the value of your Harrow leasehold, as your property will be more valuable and saleable in relation to the lease length should you want to sell. The lawyers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Owen was the the leasehold owner of a 2 bedroom apartment in Harrow on the market with a lease of a few days over sixty years left. Owen informally spoke with his freeholder being a well known Bristol-based freehold company and enquired on a premium to extend the lease. The freeholder was keen to grant an extension on non-statutory terms taking the lease to 125 years on the basis of a new rent at the outset set at £100 per annum and doubled every 25 years thereafter. Ordinarily, ground rent would not be due on a lease extension were Owen to invoke his statutory right. Owen obtained expert legal guidance and secured an acceptable deal without resorting to tribunal and sell the flat.
In 2010 we were phoned by Mr and Mrs. C Reed who, having purchased a one bedroom apartment in Harrow in March 2002. We are asked if we could estimate the premium would be to prolong the lease by 90 years. Comparable homes in Harrow with 100 year plus lease were in the region of £171,800. The average amount of ground rent was £55 billed monthly. The lease concluded in 2076. Considering the 50 years unexpired we calculated the premium to the freeholder for the lease extension to be between £33,300 and £38,400 plus expenses.
An example of a Lease Extension case for a Harrow property 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.