The market value of Harlow leasehold residential property falls as the lease term becomes shorter and this will have an impact on its saleability. The cost of extending the lease can escalate substantially once the remaining term is below than 80 years
Leasehold properties in Harlow with in excess of one hundred years outstanding on the lease are often regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your home. In such circumstances there is often little upside in buying the freehold unless savings on ground rent and maintenance charges justify it.
| 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. |
| Godiva Mortgages | A minimum of 70 years unexpired lease at completion for all scheme types apart from Lifetime Mortgages (Equity Release), which require a minimum unexpired term of 80 years at completion. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| Skipton Building Society | 85 years from the date of completion of the mortgage For Buy to Let cases: - lettings must not breach any of the lessee’s covenants; and - consent of the lessor to lettings must be obtained if necessary |
The conveyancers that we work with handle Harlow 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 conveyancing solicitor we work with provide it.
Nathaniel owned a 2 bedroom flat in Harlow being sold with a lease of fraction over 61 years outstanding. Nathaniel on an informal basis spoke with his freeholder being a well known London-based freehold company and enquired on a premium to extend the lease. The landlord was prepared to agree an extension on non-statutory terms taking the lease to 125 years on the basis of a new rent to start with set at £200 per annum and doubled every 25 years thereafter. No ground rent would be payable on a lease extension were Nathaniel to invoke his statutory right. Nathaniel procured expert advice and was able to make a more informed judgement and deal with the matter and readily saleable.
Last Christmas we were approach by Dr Alisha Ali , who completed a one bedroom apartment in Harlow in January 2005. We are asked if we could shed any light on how much (roughly) price would likely be for a 90 year lease extension. Similar residencies in Harlow with an extended lease were valued about £166,400. The mid-range ground rent payable was £60 collected annually. The lease finished on 20 October 2078. Having 54 years outstanding we approximated the premium to the freeholder for the lease extension to be within £32,300 and £37,400 not including costs.
Last month we were phoned by Mr T Watson , who took over the lease of a one bedroom flat in Harlow in February 2011. We are asked if we could shed any light on how much (roughly) compensation to the landlord could be to extend the lease by 90 years. Comparative properties in Harlow with 100 year plus lease were worth £227,800. The average amount of ground rent was £45 invoiced monthly. The lease terminated in 2089. Considering the 65 years as a residual term we calculated the compensation to the freeholder for the lease extension to be within £13,300 and £15,400 plus professional charges.