On the balance of probabilities where you own a flat in Harwich you actually own a long leasehold interest over your property
Leasehold residencies in Harwich with over 100 years unexpired on the lease are often regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your premises. In such circumstances there is often little to be gained by purchasing the reversionary interest unless savings on ground rent and estate charges warrant 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 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; |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| 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. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
Regardless of whether you are a tenant or a freeholder in Harwich,the lease extension experts that we work with will always be happy to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Harwich valuers.
Charlie was the the leasehold owner of a high value flat in Harwich being marketed with a lease of fraction over 61 years outstanding. Charlie on an informal basis approached his freeholder being a well known Manchester-based freehold company and enquired on a premium to extend the lease. The landlord indicated a willingness to grant an extension taking the lease to 125 years on the basis of a new rent initially set at £200 per annum and increase every twenty five years thereafter. No ground rent would be payable on a lease extension were Charlie to exercise his statutory right. Charlie obtained expert legal guidance and was able to make a more informed judgement and handle with the matter and ending up with a market value flat.
In 2013 we were contacted by Mr and Mrs. S Lefèvre who, having acquired a garden apartment in Harwich in April 1996. We are asked if we could estimate the compensation to the landlord could be to prolong the lease by a further 90 years. Comparable premises in Harwich with 100 year plus lease were worth £246,800. The mid-range amount of ground rent was £60 invoiced per annum. The lease elapsed in 2075. Considering the 50 years outstanding we estimated the compensation to the freeholder for the lease extension to be within £44,700 and £51,600 plus fees.
Last Winter we were phoned by Mr Milo Leroy , who purchased a one bedroom flat in Harwich in April 2007. The dilemma was if we could approximate the compensation to the landlord would be for a ninety year lease extension. Identical homes in Harwich with a long lease were worth £208,200. The mid-range amount of ground rent was £65 collected per annum. The lease came to a finish on 6 August 2086. Considering the 61 years remaining we approximated the premium to the freeholder for the lease extension to be within £20,000 and £23,000 plus costs.