Harwell leases on residential properties are gradually decreasing in value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of your lease gets more expensive. It is the case that most Harwell tenants have the right to extend their lease by an additional ninety years in accordance with the 1993 Leasehold Reform Act. Where you are a leasehold owner in Harwell you would be well advised to investigate if your lease has between 70 and ninety years left. There are compelling reasons why a Harwell flat owner with a lease having around eighty years remaining should take steps to ensure that a lease extension is put in place without delay
Leasehold residencies in Harwell with over 100 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 property. In such situations there is often little to be gained by buying the reversionary interest unless savings on ground rent and maintenance charges merit it.
| 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; |
| 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. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Using our service gives you enhanced control over the value of your Harwell leasehold, as your property will be more valuable and saleable in respect of lease length should you want to sell. The lawyers that we work with have a in-depth market knowledge handling many hundreds of lease extensions or freehold purchase transactions.
Last Christmas Finn, started to get close to the 80-year threshold with the lease on his one bedroom flat in Harwell. Having bought his home 18 years previously, the unexpired term was of little significance. As luck would have it, he became aware that he would imminently be paying an escalated premium for Extending the lease. Finn extended the lease just under the wire in May. Finn and the freeholder via the managing agents subsequently agreed on a premium of £6,000 . If he failed to meet the deadline, the figure would have increased by at least £1,050.
Mr and Mrs. B Phillips took over the lease of a one bedroom apartment in Harwell in October 1998. The dilemma was if we could shed any light on how much (approximately) compensation to the landlord could be for a 90 year extension to my lease. Similar properties in Harwell with an extended lease were valued around £246,800. The mid-range ground rent payable was £60 billed per annum. The lease elapsed in 2076. Considering the 50 years outstanding we approximated the premium to the freeholder to extend the lease to be within £44,700 and £51,600 plus expenses.
Mrs G Bennett acquired a newly refurbished apartment in Harwell in March 2008. We are asked if we could shed any light on how much (approximately) price would be for a ninety year extension to my lease. Similar premises in Harwell with a long lease were valued about £203,200. The average ground rent payable was £65 collected yearly. The lease expired on 5 January 2087. Considering the 61 years left we approximated the premium to the landlord for the lease extension to be between £19,000 and £22,000 not including costs.