It’s an underpublicised truth that a Harlington 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 early years due to the loss of value being disguised by increases in the Harlington property prices.Once your lease nears 85ish years, you need to start thinking about a lease extension. If the number of years remaining falls below 80 years, you will then be required to pay 50% of the property's 'marriage value' in addition to the usual cost of the lease extension to the landlord. The marriage fee is the amount of extra value that a lease extension will add the property The majority of flat owners in Harlington will be able to extend under the legislation; however a conveyancing solicitor should be able to confirm if you qualify for an extension. In some situations you may not be entitled. There are also strict deadlines and procedures to be adhered to once the process has commenced and you will need to be guided by your lawyer for the duration of the formalities.
It is conventional wisdom that a residential leasehold with over one hundred 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 premises will be equivalent in value to a freehold for decades to come.
| Lender | Requirement |
|---|---|
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| 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. |
| Lloyds TSB Scotland | 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. |
Using our service will provide you better control over the value of your Harlington leasehold, as your property will be more valuable and marketable in relation to the lease length should you want to sell. The conveyancing solicitors that we work with have a wealth of experience of handling many hundreds of lease extensions or freehold purchase transactions.
Jamie was the the leasehold proprietor of a high value apartment in Harlington being sold with a lease of a few days over 59 years unexpired. Jamie on an informal basis spoke with his freeholder a well known local-based freehold company and enquired on a premium to extend the lease. The freeholder was prepared to agree an extension on non-statutory terms taking the lease to 125 years on the basis of a new rent initially set at £100 per annum and doubled every 25 years thereafter. Ordinarily, ground rent would not be payable on a lease extension were Jamie to invoke his statutory right. Jamie obtained expert legal guidance and secured satisfactory deal informally and readily saleable.
In 2009 we were called by Mrs M González who, having purchased a one bedroom apartment in Harlington in January 1995. We are asked if we could shed any light on how much (approximately) price would likely be for a 90 year extension to my lease. Comparable properties in Harlington with 100 year plus lease were valued around £254,200. The average ground rent payable was £60 billed per annum. The lease ended in 2076. Given that there were 51 years remaining we estimated the compensation to the landlord to extend the lease to be within £43,700 and £50,600 not including professional charges.
An example of a Freehold Enfranchisement decision for a Harlington property is 164 Nestles Avenue in October 2013. The tribunal agreed with the proposed price of £20,158 for the freehold and determined that that sum is the amount to be paid into court This case affected 2 flats. The unexpired lease term was 69 years.