Owning a flat usually means owning a lease of the property, this is a ‘time-limited’ interest becoming shorter every day. The lease will ordinarily be granted for a fixed period of time , usually 99 or 125 years, although we have come across longer and shorter terms in Ely. Inevitably, the period of lease left shortens as time goes by. This may slip by relatively unnoticed when the property has to be disposed of or refinanced. The fewer the years remaining the lower the value of the property and the more it will cost to extend the lease. Qualifying long lease owners in Ely have the legal entitlement to extend the lease for a further ninety years in accordance with the 1993 Leasehold Reform Act. Please give due consideration before putting off your Ely lease extension. Holding off that expense now simply increases the price you will eventually have to pay for a lease extension
It is conventional wisdom that a property with more than 100 years unexpired lease term is worth roughly the same as a freehold. Where an further ninety years added to all but the shortest lease, the premises will be worth the same as a freehold for decades to come.
| Lender | Requirement |
|---|---|
| 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. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must also be not less than 75 years at the outset of the mortgage. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Regardless of whether you are a tenant or a landlord in Ely,the lease extension lawyers that we work with will always be happy to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Ely valuers.
Last Winter Jackson, started to get close to the 80-year threshold with the lease on his studio apartment in Ely. In buying his flat two decades ago, the length of the lease was of minimal significance. by good luck, he noticed he needed to take steps soon on Extending the lease. Jackson arranged for a lease extension just ahead of time in July. Jackson and the landlord who owned the flat above in the end agreed on an amount of £5,500 . If the lease had dipped lower than eighty years, the premium would have become more costly by at least £875.
In 2014 we were approached by Mr and Mrs. K Ali who, having moved into a one bedroom apartment in Ely in July 2012. We are asked if we could estimate the price would likely be to prolong the lease by ninety years. Similar residencies in Ely with 100 year plus lease were valued around £206,200. The mid-range ground rent payable was £60 collected monthly. The lease ended in 2081. Given that there were 56 years as a residual term we calculated the compensation to the freeholder to extend the lease to be between £31,400 and £36,200 plus professional charges.
In 2009 we were phoned by Mr R Hall who, having owned a newly refurbished apartment in Ely in January 2000. The dilemma was if we could approximate the price could be to prolong the lease by a further 90 years. Identical flats in Ely with 100 year plus lease were in the region of £300,000. The average ground rent payable was £50 invoiced every twelve months. The lease end date was in 2101. Given that there were 76 years remaining we approximated the premium to the freeholder to extend the lease to be between £8,600 and £9,800 not including professional charges.