West Harrow leases on residential properties are gradually diminishing in value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of the 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 would be well advised to investigate if your lease has between seventy and ninety years left. There are compelling reasons why a West Harrow flat owner with a lease having around eighty years left should take steps to ensure that a lease extension is effected without delay
It is conventional wisdom that a property with in excess of 100 years remaining is worth approximately the same as a freehold. Where an further ninety years added to any lease with more than 45 years unexpired, the property will be equivalent in value to 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; |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
Engaging our service will provide you increased control over the value of your West Harrow leasehold, as your property will be more valuable and marketable in relation to the lease length should you wish to sell. The conveyancers that we work with have a wealth of experience of handling many hundreds of lease extensions or freehold purchase transactions.
After lengthy correspondence with the landlord of her ground floor flat in West Harrow, Grace initiated the lease extension process just as the lease was coming close to the all-important eighty-year deadline. The legal work was concluded in February 2009. The landlord’s costs were restricted to about 700 GBP.
In 2009 we were contacted by Dr Imogen Moreau who, having owned a ground floor flat in West Harrow in April 2006. The dilemma was if we could estimate the price would be to extend the lease by 90 years. Comparable homes in West Harrow with an extended lease were valued about £295,000. The mid-range ground rent payable was £45 collected annually. The lease finished on 15 February 2099. Taking into account 74 years left we estimated the premium to the freeholder for the lease extension to be within £9,500 and £11,000 exclusive of professional charges.
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 was in relation to 1 flat. The remaining number of years on the lease was 75.25 years.