It’s a harsh certainty that a Harwich residential lease is a deteriorating asset. As the lease term diminishes so does the value of the property. The extent of this is not fully appreciated in the early years due to the reduction being disguised by increases in the Harwich property market.Once your lease nears 85ish years, you should start thinking about a lease extension. If the number of years remaining falls below eighty years, you will end up paying 50% of the property's 'marriage value' on top of the usual cost of the lease extension to the landlord. Marriage value is the amount of extra value that a lease extension will add the property Most leasehold owners in Harwich will be able to extend under the legislation; however a conveyancing solicitor should be able to clarify whether you qualify for an extension. In some cases you may not be entitled. There are also strict timetables and procedures to follow once the process is instigated and you will need to be guided by your conveyancer throughout the formalities.
It is generally accepted that a residential leasehold with in excess of one hundred years unexpired lease term is worth approximately the same as a freehold. Where an further ninety years added to all but the shortest lease, the premises will be worth the same as a freehold for many years in the future.
| 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| Santander | You must report the unexpired lease term to us and await our instructions if: 1. the unexpired term assumed by our valuer is between 55 and 82 years, but the actual unexpired term differs by more than one year (whether longer or shorter); or 2. the unexpired term assumed by our valuer is more than 82 years but the actual unexpired term is less than 82 years; or 3. no valuation report is provided However, we will not accept a lease where on expiry of the mortgage: (i) less than 50 years remain and all or part of the loan is repaid on an interest-only basis: or (ii) less than 30 years remain and the loan is repaid on a capital and interest basis We will accept a lease that has been extended under the provisions of the Leasehold Reform Act 1993 provided statutory compensation would be available to the leaseholder. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
Lease extensions in Harwich can be a difficult process. We recommend you procure guidance from a conveyancer and surveyor well versed in the legislation and lease extension process.
We provide you with an expert from a selection of lease extension solicitors, which ensures a targeted and efficient service as you have a dedicated port of call with an individual lawyer. Our lease extension solicitors have in-depth market knowledge dealing with Harwich lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
In recent months Austin, came very close to the 80-year mark with the lease on his basement flat in Harwich. In buying his home 18 years ago, the unexpired term was of minimal concern. As luck would have it, he became aware that he would soon be paying way over the odds for a lease extension. Austin extended the lease at the eleventh hour in March. Austin and the freeholder via the management company subsequently agreed on a premium of £5,000 . If he failed to meet the deadline, the sum would have become more exhorbitant by at least £1,150.
Last Winter we were contacted by Ms I Hill , who was assigned a lease of a ground floor apartment in Harwich in November 1999. We are asked if we could approximate the premium would likely be to extend the lease by an additional years. Similar properties in Harwich with an extended lease were worth £265,000. The mid-range ground rent payable was £50 invoiced quarterly. The lease lapsed in 2098. Taking into account 73 years left we estimated the compensation to the freeholder to extend the lease to be within £9,500 and £11,000 not including fees.
Dr Andrew Cox completed a basement flat in Harwich in October 1997. We are asked if we could shed any light on how much (approximately) premium could be for a ninety year lease extension. Similar residencies in Harwich with an extended lease were worth £264,000. The mid-range amount of ground rent was £60 collected every twelve months. The lease came to a finish in 2078. Given that there were 53 years outstanding we estimated the premium to the freeholder to extend the lease to be within £37,100 and £42,800 not including legals.