As the length of the unexpired term of a Harrow residential lease lessens so does its value and therefore the value of your property. Where the residual term has, beyond 125 years to run then this decrease may be of little impact nevertheless there will become a stage when a lease has less than eighty years left as part of the premium you will incur is what is known as a marriage value. This could be significant. It is the main logic behind why you should extend the lease sooner than later. Many flat owners in Harrow will qualify for this right; however a conveyancer should be able to advise if you qualify 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.
Leasehold premises in Harrow with over one hundred years unexpired on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your home. In such circumstances there is often little to be gained by purchasing the reversionary interest unless savings on ground rent and maintenance 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. |
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage are not acceptable. 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. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 30 years plus the term of the mortgage at the outset of the mortgage. |
| Santander | If the property is leasehold, the remaining unexpired lease term at the end of the new mortgage term must be at least 50 years where any part of the mortgage is on Interest Only and 30 years if all loan parts are on Capital Repayment and Interest. You must report the unexpired lease term to us and await our instructions if:
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Using our service gives you enhanced 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 conveyancing solicitors that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
In recent months Leo, came critically near to the eighty-year mark with the lease on his first floor apartment in Harrow. Having bought his property two decades ago, the unexpired term was of no interest. As luck would have it, he realised he would soon be paying an inflated amount for Extending the lease. Leo extended the lease at the eleventh hour last March. Leo and the freeholder via the managing agents eventually agreed on the final figure of £5,000 . If he had missed the deadline, the amount would have gone up by at least £1,000.
Last Winter we were contacted by Mr and Mrs. N Rivera , who purchased a one bedroom apartment in Harrow in October 1998. We are asked if we could approximate the price would be to extend the lease by ninety years. Identical premises in Harrow with 100 year plus lease were in the region of £285,000. The mid-range ground rent payable was £45 collected per annum. The lease concluded in 2098. Considering the 72 years left we approximated the premium to the landlord for the lease extension to be between £12,400 and £14,200 not including expenses.
An example of a Lease Extension decision for a Harrow flat 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 affected 1 flat. The remaining number of years on the lease was 75.25 years.