With a residential leasehold property in Ely, you are actually purchasing a right to live in a property for a prescribed time frame. Modern flat leases are usually granted for 99 years or 125. Even though this may appear like a long period of time, you may consider a lease extension sooner rather than later. The general rule is that the shorter the number of years is the cost of extending the lease gets disproportionately more expensive particularly once there are fewer than eighty years left. Anyone in Ely with a lease nearing 81 years left should seriously consider extending it sooner than later. When a lease has under 80 years outstanding, under the relevant legislation the landlord can calculate and charge a greater amount, based on a technical multiplication, known as “marriage value” which is due.
Leasehold residencies in Ely with more than 100 years unexpired 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 purchasing the freehold unless savings on ground rent and service charges justify it.
| 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; |
| 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
Irrespective of whether you are a tenant or a freeholder in Ely,the lease extension lawyers that we work with will always be willing 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.
In 2014 George, came perilously near to the 80-year mark with the lease on his one bedroom apartment in Ely. In buying his flat 18 years previously, the unexpired term was of little relevance. Luckily, he became aware that he would soon be paying an escalated premium for Extending the lease. George was able to extend his lease just in the nick of time in September. George and the landlord who owned the flat above eventually settled on the final figure of £5,500 . If the lease had dipped to less than 80 years, the price would have escalated by at least £1,075.
Mr N Lambert owned a garden apartment in Ely in August 2012. We are asked if we could shed any light on how much (roughly) price could be to prolong the lease by ninety years. Identical flats in Ely with 100 year plus lease were in the region of £181,600. The average ground rent payable was £55 billed quarterly. The lease terminated on 9 September 2077. Having 52 years left we approximated the compensation to the freeholder for the lease extension to be between £30,400 and £35,200 not including legals.
Dr E Taylor owned a purpose-built flat in Ely in April 2012. The question was if we could shed any light on how much (approximately) compensation to the landlord could be to extend the lease by 90 years. Identical properties in Ely with 100 year plus lease were valued about £290,000. The average ground rent payable was £45 collected annually. The lease expired in 2097. Considering the 72 years left we estimated the compensation to the freeholder for the lease extension to be within £11,400 and £13,200 plus legals.