West Harrow leases on residential properties are gradually losing 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. Legislation has been in place for sometime now which permits qualifying West Harrow residential leaseholders to extend the terms of long leases. If you are a leasehold owner in West Harrow you should investigate if your lease has between seventy and 90 years remaining. There are good reasons why a West Harrow leaseholder with a lease having around 80 years unexpired should take steps to make sure that a lease extension is put in place without delay
Leasehold premises in West Harrow with over one hundred years remaining 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 premises. In such circumstances there is often little to be gained by purchasing the reversionary interest unless savings on ground rent and maintenance charges warrant it.
| Lender | Requirement |
|---|---|
| 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. |
| 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. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
| 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. |
The lawyers that we work with handle West Harrow lease extensions and help protect your position. A lease extension can be arranged to be completed to coincide with a change of ownership so the costs of the lease extension are paid for using part of the sale proceeds. You really do need expert legal advice in this difficult and technical area of law. The lawyer we work with provide it.
In 2014 Oscar, started to get close to the 80-year mark with the lease on his basement apartment in West Harrow. Having bought his property 19 years previously, the lease term was of minimal interest. Luckily, he recognised he needed to take action soon on Extending the lease. Oscar arranged for a lease extension at the eleventh hour last July. Oscar and the freeholder via the management company ultimately settled on an amount of £6,000 . If the lease had slid to less than 80 years, the amount would have escalated by a minimum £1,050.
In 2011 we were contacted by Mrs Robyn Moore who, having owned a newly refurbished apartment in West Harrow in June 1999. We are asked if we could approximate the price would be to extend the lease by a further 90 years. Comparative residencies in West Harrow with 100 year plus lease were worth £300,000. The mid-range ground rent payable was £50 invoiced monthly. The lease concluded in 2102. Considering the 76 years remaining we estimated the compensation to the landlord to extend the lease to be between £8,600 and £9,800 exclusive of costs.
An example of a Lease Extension decision for a West Harrow flat is flat 93b Welldon Crescent in May 2009. The Tribunals valuation for a 90-year lease extension of this fat was £13,171 This case affected 1 flat. The unexpired residue of the current lease was 75.25 years.