The re-sale value of a leasehold property in Ely depends on how long the lease has remaining. If it is near to or fewer than 80 years you should anticipate difficulties on re-sale, so it is advisable to arrange for the lease to be extended ahead of purchasing. It is preferable to commence the process of extending the lease is when a lease still has 82 years to run so that formalities can be concluded well before the eighty year cut off point. Current legislation entitles Ely qualifying lessees to acquire a lease extension of ninety years in addition to the remaining lease term at a peppercorn rent (that is, rent free). The intention of the valuation is to arrive at an opinion of the sum payable by the lessee to the freeholder for the purchase of the lease extension.
Leasehold premises in Ely with in excess of one hundred years remaining on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your premises. In such situations there is often little upside in buying the reversionary interest unless savings on ground rent and service charges justify it.
| 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. |
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| National Westminster Bank | Mortgage term plus 30 years. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
Irrespective of whether you are a tenant or a freeholder in Ely,the lease extension solicitors that we work with will always be happy to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with Ely valuers.
In 2014 Kai, started to get close to the eighty-year threshold with the lease on his first floor flat in Ely. In buying his home 18 years ago, the length of the lease was of no relevance. Luckily, he recognised he needed to take steps soon on Extending the lease. Kai extended the lease just under the wire last August. Kai and the freeholder eventually settled on a premium of £5,500 . If the lease had gone below 80 years, the figure would have escalated by at least £950.
Dr N Clarke purchased a basement flat in Ely in January 2012. The dilemma was if we could estimate the compensation to the landlord would be to extend the lease by ninety years. Comparable homes in Ely with 100 year plus lease were valued about £295,000. The mid-range amount of ground rent was £45 invoiced annually. The lease terminated on 24 September 2099. Having 74 years outstanding we approximated the compensation to the landlord for the lease extension to be within £8,600 and £9,800 plus expenses.
In 2011 we were contacted by Dr Jasper Sharif who, having took over the lease of a ground floor apartment in Ely in June 1995. The dilemma was if we could estimate the premium would likely be for a ninety year extension to my lease. Comparable premises in Ely with an extended lease were in the region of £243,000. The average amount of ground rent was £65 billed per annum. The lease came to a finish on 28 June 2088. Taking into account 63 years unexpired we calculated the premium to the freeholder to extend the lease to be between £20,000 and £23,000 not including costs.