Gamlingay leases on residential properties are gradually losing value. The shorter the remaining lease term becomes, the less it is worth – and accordingly any extension of the lease becomes more expensive. Legislation has been in place for sometime now allowing qualifying Gamlingay residential leaseholders to extend the terms of long leases. Where you are a leasehold owner in Gamlingay you must investigate if your lease has between seventy and ninety years left. In particular once the remaining lease term slips under eighty years, the compensation to the landlord for any lease extension increases dramatically as part of the premium you pay is what is known as a marriage value
Leasehold premises in Gamlingay with in excess of 100 years outstanding on the lease are often referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your home. In such situations there is often little upside in buying the freehold unless savings on ground rent and service charges warrant 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; |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| Santander | You must report the unexpired lease term to us and await our instructions if: 1. the unexpired term assumed by our valuer is between 55 and 82 years, but the actual unexpired term differs by more than one year (whether longer or shorter); or 2. the unexpired term assumed by our valuer is more than 82 years but the actual unexpired term is less than 82 years; or 3. no valuation report is provided However, we will not accept a lease where on expiry of the mortgage: (i) less than 50 years remain and all or part of the loan is repaid on an interest-only basis: or (ii) less than 30 years remain and the loan is repaid on a capital and interest basis We will accept a lease that has been extended under the provisions of the Leasehold Reform Act 1993 provided statutory compensation would be available to the leaseholder. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
The conveyancing solicitors that we work with handle Gamlingay 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.
Luca was the the leasehold proprietor of a 2 bedroom apartment in Gamlingay being sold with a lease of a little over 72 years left. Luca informally approached his landlord being a well known Bristol-based freehold company and enquired on a premium to extend the lease. The landlord indicated a willingness to extend the lease to 125 years on the basis of an increased rent to £50 yearly. Ordinarily, ground rent would not be payable on a lease extension were Luca to invoke his statutory right. Luca procured expert legal guidance and secured an acceptable deal informally and readily saleable.
Last Autumn we were called by Ms K Sánchez , who bought a recently refurbished apartment in Gamlingay in June 2007. The dilemma was if we could estimate the compensation to the landlord would likely be to extend the lease by a further 90 years. Identical properties in Gamlingay with an extended lease were worth £186,000. The mid-range amount of ground rent was £65 billed annually. The lease ran out in 2083. Having 58 years as a residual term we calculated the compensation to the landlord to extend the lease to be between £24,700 and £28,600 not including fees.
Last Autumn we were contacted by Mr and Mrs. E Norbert , who owned a purpose-built apartment in Gamlingay in October 2010. The question was if we could approximate the price would likely be for a ninety year lease extension. Comparative flats in Gamlingay with 100 year plus lease were in the region of £250,000. The mid-range ground rent payable was £50 invoiced annually. The lease finished on 21 April 2094. Considering the 69 years left we estimated the premium to the landlord for the lease extension to be within £9,500 and £11,000 exclusive of expenses.