It’s an underpublicised certainty that a Market Harborough residential lease is a deteriorating asset. The lease value drops in proportion to its lease length. The extent of this is not fully appreciated in the first few years due to the deflation being disguised by increases in the Market Harborough property prices.Where your lease has approximately 90 years left, you need to start thinking about a lease extension. If lease term dips below eighty years, you will then be required to pay 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 The majority of leasehold owners in Market Harborough will be able to extend under the legislation; however a conveyancer should be able to clarify if you qualify for an extension. In some situations you may not qualify. There are also strict timeframes and procedures to follow once the process is initiated and you will need to be guided by your lawyer for the duration of the formalities.
It is generally accepted that a property with over 100 years remaining is worth approximately the same as a freehold. Where an additional 90 years added to any lease with more than 30 years remaining, the property will be worth the same as a freehold for decades to come.
| 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; |
| Halifax | Minimum 70 years from the date 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. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
| 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 gives you better control over the value of your Market Harborough leasehold, as your property will be more valuable and marketable in relation to the 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 Spring Jackson, started to get close to the eighty-year threshold with the lease on his two bedroom flat in Market Harborough. Having purchased his flat 19 years previously, the lease term was of little interest. As luck would have it, he realised he would soon be paying an inflated amount for a lease extension. Jackson extended the lease just ahead of time in June. Jackson and the landlord subsequently agreed on sum of £5,000 . If he failed to meet the deadline, the sum would have increased by at least £1,025.
Last Christmas we were approach by Mr Zachary Bailey , who owned a ground floor apartment in Market Harborough in April 2003. We are asked if we could shed any light on how much (approximately) premium would be to extend the lease by ninety years. Comparable properties in Market Harborough with 100 year plus lease were valued about £245,000. The mid-range amount of ground rent was £50 billed yearly. The lease concluded in 2093. Having 68 years outstanding we approximated the premium to the landlord to extend the lease to be between £9,500 and £11,000 plus expenses.
Ms Isabella James purchased a newly refurbished apartment in Market Harborough in March 1996. We are asked if we could approximate the premium would likely be for a 90 year extension to my lease. Similar premises in Market Harborough with 100 year plus lease were in the region of £285,000. The average ground rent payable was £55 collected yearly. The lease ended in 2104. Given that there were 79 years outstanding we approximated the premium to the landlord to extend the lease to be within £13,300 and £15,400 not including professional charges.