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 the lease becomes more expensive. Legislation has been in place for sometime now allowing qualifying Harwich residential leaseholders to extend the terms of long leases. If you are a leasehold owner in Harwich you would be well advised to investigate if your lease has between 70 and 90 years left. There are good reasons why a Harwich leaseholder with a lease having around 80 years left should take steps to make sure that a lease extension is actioned without delay
Leasehold premises in Harwich with over one hundred 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 upside in purchasing the reversionary interest unless savings on ground rent and maintenance 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 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; |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Skipton Building Society | 85 years from the date of completion of the mortgage For Buy to Let cases: - lettings must not breach any of the lessee’s covenants; and - consent of the lessor to lettings must be obtained if necessary |
| 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. |
Retaining our service will provide you better control over the value of your Harwich leasehold, as your property will be more valuable and saleable in terms of lease length should you decide to sell. The conveyancers that we work with have a in-depth market knowledge handling many hundreds of lease extensions or freehold purchase transactions.
After protracted negotiations with the freeholder of her studio flat in Harwich, Harriet started the lease extension process as the 80 year threshold was fast advancing. The transaction was concluded in January 2006. The freeholder’s fees were kept to an absolute minimum.
Dr E Davies acquired a first floor apartment in Harwich in May 2005. The question was if we could approximate the compensation to the landlord would be to prolong the lease by 90 years. Comparative homes in Harwich with 100 year plus lease were in the region of £176,200. The average amount of ground rent was £65 invoiced annually. The lease expired on 7 November 2082. Having 56 years remaining we calculated the compensation to the landlord to extend the lease to be within £29,500 and £34,000 not including expenses.
Last Autumn we were e-mailed by Mr and Mrs. K Torres , who took over the lease of a one bedroom flat in Harwich in June 2005. We are asked if we could shed any light on how much (roughly) compensation to the landlord could be to extend the lease by 90 years. Identical flats in Harwich with an extended lease were valued about £242,600. The average amount of ground rent was £45 invoiced monthly. The lease ended in 2093. Considering the 67 years remaining we calculated the compensation to the landlord to extend the lease to be between £11,400 and £13,200 exclusive of costs.