If you are facing a significant premium because your lease in Harmondsworth has dropped toward the 80-year mark, your previous lawyer may be at fault. Our panel of experts specialise in recovering lease extension costs from negligent firms who failed to protect your investment.
Top reasons for lease extension now:
Increase your lease and increase your Harmondsworth property value
Harmondsworth leases on residential deteriorating in value. Where your lease has about 90 years unexpired, you should start considering the need for a lease extension. Eighty years is a significant number: when the unexpired term of a lease falls below this level then you start paying an additional element called marriage value. Flat owners in Harmondsworth will usually qualify for a lease extension; however It would be wise to check with a conveyancer to check your eligibility. In certain situations you may not be entitled. There are also strict timetables and procedures to follow once the process has started so it’s prudent to be guided by a conveyancing solicitor during the process.
An extended lease has roughly the same value as a freehold
It is generally considered that a residential leasehold with over one hundred years remaining is worth approximately the same as a freehold. Where an further 90 years added to any lease with more than 30 years unexpired, the residence will be worth the same as a freehold for decades to come.
Lenders may not loan monies on a short lease
Mortgage companies are really clamping down as regards to properties in Harmondsworth with short leases. For example you may find that their lending requirements are stricter and that they adjust interest rates depending on how many years are left on the lease. Some may even refrain from lending completely, so if you needed to sell, your only options would be to find a cash buyer, or try your luck at auction thus reducing your market.
| 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.
|
| Leeds Building Society |
85 years remaining from the start of the mortgage.
|
| TSB |
Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption.
|
| The Mortgage Works |
Minimum unexpired lease term is 70 years with 30 years remaining at the end of the mortgage term.
Where the unexpired lease term is different to that recorded on the mortgage offer, the following clarifies if we need to be informed:
Second hand property:
- If the unexpired lease term on the offer is 85 years or more - only advise us if the actual lease term is less than 85 years
- if the unexpired lease term on the offer is less than 85 years – advise us if the actual lease term is different than reported
- For equity share applications - advise us if the actual lease term is different than reported on the offer
New build property:
- If the unexpired lease term stated on the offer is 125 years (flat) / 250 years (house) or more - only advise us if the actual lease term is less than 125 years (flat) / 250 years (house)
- For equity share applications - always advise us if the actual lease term is different than reported on the offer
Lease terms such as ground rent and event fees must be reasonable at all times during the term of the lease and adhere to our requirements below. If you’re unsure as to whether the terms of a lease are unreasonable or onerous, please refer the details to us in plain English for Valuer consideration. If the potentially onerous terms are in relation to the ground rent please include the current ground rent figure per annum, how often it will be reviewed and the price structure it will be reviewed against. See the guidance below.
SECOND HAND PROPERTIES
Unacceptable - advise Issuing Office (Will be declined):
- Unexpired lease term less than 70 years
- Less than 30 years remaining at the end of the mortgage term
- Ground Rent greater than 0.5% of the property value
- Ground Rent doubles less than every 20 years (e.g. doubles every 5, 10 or 15 years) - acceptable if doubles every 20 years or more
- Ground Rent is compounded RPI
- Ground Rent review period less than or equal to 5 years
Refer to Issuing Office (Valuer will consider any impact on valuation figure and marketability):
- Unexpired lease term is 70 to 85 years
- Ground Rent greater than 0.1% and less than or equal to 0.5% of the property value
- Ground Rent escalation is linked to any indices greater than RPI
- Ground Rent escalation is linked to the value of the building*
- Ground Rent review period is greater than 5 and less than 10 years
- Event clauses exist for normal use e.g. changing the carpet, installing a TV aerial etc
- Estate Rent Charges greater than £500 p/a (please provide details of what the charges cover)
- Service Charges greater than 1.0% of property value p/a (please provide details of what the charges cover)
- Anything that appears onerous, unusual or out of the ordinary
Acceptable (no requirement to advise Issuing Office):
- Unexpired lease term greater than 85 years
- Ground Rent less than or equal to 0.1% of the property value
- Ground Rent review period greater than or equal to 10 years
- Ground Rent escalation less than or equal to RPI
NEW BUILD PROPERTIES (includes office conversions)
Unacceptable - advise Issuing Office (will be declined):
- Unexpired lease term less than 125 years on a new build flat or less than 250 years on a new build house
- Any lease which is subject to a ground rent (or annual rent) being charged which is more than on a peppercorn basis
- Any lease which is subject to a ground rent (or annual rent) being reviewed and altered on any review basis or methodology
Refer to Issuing Office (Valuer will consider any impact on valuation figure and marketability):
- Event clauses exist for normal use e.g. changing the carpet, installing a TV aerial etc
- Estate Rent Charges greater than £500 p/a (please provide details of what the charges cover)
- Service Charges greater than 1.0% of property value p/a (please provide details of what the charges cover)
- Anything else appears onerous, unusual or out of the ordinary
Acceptable (no requirement to advise Issuing Office):
- Unexpired lease term greater than or equal to 125 years on a new build flat or greater than or equal to 250 years on a new build house
- A lease subject to a peppercorn ground rent (annual rent) charges
For the avoidance of doubt, any new build properties completed but not sold pre 30 June 2022 will only be acceptable if the lease conforms to the above guidance
* Where the Ground Rent escalation is linked to the value of the building, please provide the following:
- How is the value of the block/unit currently calculated and if the assessment relates to the block(s), how is the Ground Rent calculated/apportioned per property?
- The current valuation and Ground Rent for each unit
- What is the mechanism for future valuations of the block and how is the Ground Rent calculated/apportioned?
- What is the right of appeal? And is this a documented process within the lease?
- Who bears the cost of the valuation (and appeal) process?
- Confirmation the review period is not less than twenty years
Lease Extensions We require all Lease Extensions to be completed under the Leasehold Reform Housing and Urban Development Act 1993 and to meet the above criteria as a minimum. Where a proposed Lease Extension does not meet these requirements, however you feel that this is in the best interest for our mutual client, please refer all details to the Issuing Office for us to consider.
Please ensure that all lender enquiries are submitted (with full documentation/requirements) at least 2 weeks prior to exchange to allow sufficient time for review and decisioning.
|
| Royal Bank of Scotland |
Mortgage term plus 30 years.
|
Get in touch with one of our Harmondsworth lease extension solicitors or enfranchisement solicitors
Regardless of whether you are a tenant or a landlord in Harmondsworth,the lease extension solicitors that we work with will always be prepared to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Harmondsworth valuers.
Harmondsworth Lease Extension Case Studies:
Callum, Harmondsworth, West London,
Callum owned a 2 bedroom flat in Harmondsworth on the market with a lease of a little over 61 years unexpired. Callum informally contacted his landlord being a well known Manchester-based freehold company for a lease extension. The freeholder indicated a willingness to extend the lease to 125 years subject to a new rent initially set at £100 per annum and increase every twenty five years thereafter. No ground rent would be due on a lease extension were Callum to invoke his statutory right. Callum procured expert advice and was able to make an informed judgement and handle with the matter and sell the property.
Harmondsworth case:
Mrs Katherine Thompson owned a ground floor apartment in Harmondsworth in March 2007. We are asked if we could estimate the premium could be for a ninety year lease extension. Identical flats in Harmondsworth with a long lease were worth £285,000. The average amount of ground rent was £45 billed annually. The lease lapsed on 3 October 2098. Considering the 72 years as a residual term we calculated the premium to the freeholder to extend the lease to be between £12,400 and £14,200 plus legals.
Decision in Hillingdon
An example of a Freehold Enfranchisement case for a Harmondsworth 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 was in relation to 2 flats. The unexpired term as at the valuation date was 69 years.