When it comes to domestic leasehold property in South Harrow, you are actually buying a right to reside in a property for a prescribed time frame. These days flat leases typically tend to be for 99 years or 125. Many leasehold owners become complacent as this seems like a lengthy period of time, you should consider a lease extension sooner as opposed to later. The general rule is that the shorter the number of years is the cost of extending the lease increases markedly particularly when there are fewer than 80 years left. Anyone in South Harrow with a lease nearing 81 years left should seriously consider extending it without delay. When the lease term has less than 80 years remaining, under the relevant Act the freeholder is entitled to calculate and levy a greater premium, assessed on a technical multiplication, strangely termed as “marriage value” which is due.
It is generally accepted that a property with over 100 years unexpired lease term is worth approximately the equivalent as a freehold. Where an further ninety years added to any lease with more than 35 years remaining, the premises will be equivalent in value to a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| 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; |
| Coventry Building Society | 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. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
The conveyancers that we work with undertake South Harrow 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 conveyancer we work with provide it.
Last October Edward, started to get close to the eighty-year mark with the lease on his one bedroom apartment in South Harrow. Having bought his flat two decades ago, the unexpired term was of no importance. Fortunately, he recognised he would imminently be paying an escalated premium for Extending the lease. Edward extended the lease at the eleventh hour last May. Edward and the freeholder subsequently settled on a premium of £6,000 . If the lease had slid below eighty years, the price would have escalated by a minimum £975.
In 2011 we were called by Dr W García who, having owned a one bedroom flat in South Harrow in September 2010. We are asked if we could estimate the price would likely be to prolong the lease by an additional years. Identical premises in South Harrow with an extended lease were in the region of £193,400. The average amount of ground rent was £65 collected yearly. The lease came to a finish on 19 April 2084. Given that there were 59 years unexpired we approximated the compensation to the landlord for the lease extension to be between £21,900 and £25,200 exclusive of legals.
An example of a Lease Extension case for a South Harrow residence is GFF 1 Holyrood Avenue in May 2014. The Tenant wished to acquire a new (extended) lease and applied to the Willesden County Court who granted a vesting order on 20* March2013. The Tribunal decied that the premium to be paid was £9,062 This case was in relation to 1 flat. The unexpired residue of the current lease was 79 years.