Harwich 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 Harwich tenants have the right to extend their lease by an additional ninety years in accordance with the 1993 Leasehold Reform Act. If you are a leasehold owner in Harwich you should see if your lease has between 70 and ninety years remaining. In particular once the remaining lease term slips under 80 years, the premium due on any lease extension increases dramatically as an element of the premium you pay is what is known as a marriage value
It is generally considered that a residential leasehold with in excess of 100 years remaining is worth approximately the equivalent as a freehold. Where an further 90 years added to all but the shortest lease, the residence will be worth the same as a freehold for many years in the future.
| 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; |
| 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. |
| Coventry Building Society | 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 landlord in Harwich,the lease extension lawyers 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.
Half a year ago George, started to get near to the 80-year threshold with the lease on his garden apartment in Harwich. In buying his property twenty years previously, the length of the lease was of little relevance. As luck would have it, it dawned on him that he would soon be paying way over the odds for Extending the lease. George extended the lease just ahead of time last August. George and the freeholder in the end settled on sum of £5,000 . If he not met the deadline, the amount would have gone up by a minimum £1,075.
Last Christmas we were approach by Mr O Lambert , who acquired a one bedroom flat in Harwich in April 1997. We are asked if we could approximate the price would likely be for a ninety year lease extension. Identical residencies in Harwich with 100 year plus lease were worth £275,000. The average ground rent payable was £55 billed yearly. The lease lapsed on 18 March 2102. Given that there were 76 years remaining we calculated the premium to the landlord to extend the lease to be between £9,500 and £11,000 not including expenses.
In 2014 we were e-mailed by Ms Katherine Roberts who, having owned a ground floor flat in Harwich in February 1996. We are asked if we could approximate the price could be for a ninety year lease extension. Comparative premises in Harwich with 100 year plus lease were worth £176,200. The average ground rent payable was £65 collected monthly. The lease end date was on 19 June 2082. Having 56 years remaining we calculated the compensation to the freeholder to extend the lease to be within £29,500 and £34,000 not including fees.