Owning a flat usually means owning a lease of the property, this is a ‘time-limited’ interest becoming shorter every day. This lease will normally be granted for a set period of time , ordinarily 99 or 125 years, although we have seen longer and shorter terms in Harlesden. Inevitably, the period of lease left reduces over time. This is often ignored and only becomes a problem when the property has to be disposed of or re-mortgaged. The fewer the years remaining the lower the value of the property and the more expensive it will be to procure a lease extension. Eligible long lease owners in Harlesden have the right to extend the lease for an additional ninety years under the 1993 Leasehold Reform Act. Do give due consideration before putting off your Harlesden lease extension. Putting off that expense now simply increases the price you will ultimately incur for a lease extension
Leasehold properties in Harlesden with in excess of one hundred years remaining on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your home. In such circumstances there is often little upside in buying the reversionary interest unless savings on ground rent and maintenance charges merit 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 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. |
| National Westminster Bank | Mortgage term plus 30 years. |
Using our service will provide you increased control over the value of your Harlesden leasehold, as your property will be more valuable and saleable in respect of lease length should you decide to sell. The conveyancing solicitors that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Stanley owned a conversion apartment in Harlesden on the market with a lease of fraction over 72 years left. Stanley on an informal basis spoke with his landlord a well known Bristol-based freehold company for a lease extension. The landlord indicated a willingness to grant an extension taking the lease to 125 years on the basis of a new rent initially set at £150 per annum and increase every twenty five years thereafter. Ordinarily, ground rent would not be payable on a lease extension were Stanley to invoke his statutory right. Stanley obtained expert legal guidance and secured satisfactory deal without resorting to tribunal and readily saleable.
Dr Aiden Gray bought a studio flat in Harlesden in August 1995. The dilemma was if we could estimate the compensation to the landlord could be to prolong the lease by ninety years. Comparable homes in Harlesden with 100 year plus lease were valued about £235,200. The average ground rent payable was £45 collected quarterly. The lease came to a finish on 4 October 2090. Taking into account 66 years unexpired we approximated the compensation to the freeholder to extend the lease to be within £12,400 and £14,200 plus legals.
An example of a Lease Extension decision for a Harlesden flat is First Floor Flat 2B Fortune Gate Road in May 2013. the tribunal decided that the price payable for the lease extension was £9,331, together with £900 in respect of outstanding ground rent. This case related to 1 flat. The remaining number of years on the lease was 74.31 years.