As the length of the unexpired term of a Harrow domestic lease decreases so does its value and therefore the value of your property. If the lease has, in excess of 100 years remaining then this decrease may be negligible however there will become a stage when a lease has fewer than 80 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 consider extending sooner rather than later. Many flat owners in Harrow will qualify for this right; that being said a lawyer can confirm whether you qualify for a lease extension. In certain situations you may not qualify, the most common reason being that you have owned the property for under two years.
Leasehold properties in Harrow with more than 100 years remaining on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your premises. In such situations there is often little upside in buying the freehold unless savings on ground rent and service charges merit it.
| Lender | Requirement |
|---|---|
| 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; |
| 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. |
| 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. |
| 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. |
The conveyancing solicitors that we work with undertake Harrow lease extensions and help protect your position. A lease extension can be arranged to be completed to coincide with a change of ownership so the costs of the lease extension are paid for using part of the sale proceeds. You really do need expert legal advice in this difficult and technical area of law. The conveyancing solicitor we work with provide it.
Last Spring David, started to get close to the 80-year mark with the lease on his two bedroom apartment in Harrow. In buying his property two decades ago, the unexpired term was of no bearing. by good luck, he became aware that he needed to take steps soon on a lease extension. David was able to extend his lease just in the nick of time in March. David and the landlord who owned the flat above subsequently agreed on the final figure of £5,500 . If he failed to meet the deadline, the price would have gone up by at least £950.
Mr and Mrs. M Moore owned a ground floor flat in Harrow in November 2005. We are asked if we could estimate the compensation to the landlord would likely be to prolong the lease by ninety years. Comparable premises in Harrow with 100 year plus lease were worth £280,000. The mid-range ground rent payable was £45 billed monthly. The lease ran out on 27 March 2096. Considering the 70 years as a residual term we approximated the compensation to the freeholder for the lease extension to be within £12,400 and £14,200 exclusive of fees.
An example of a Lease Extension decision for a Harrow residence 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 related to 1 flat. The remaining number of years on the lease was 75.25 years.