Ramsey Lease Extension - Free Consultation

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Main reasons to start your Ramsey lease extension


Why you should commence your Ramsey lease extension today:

A Ramsey lease depreciates with the years remaining on the lease.

Owning a flat usually means owning a lease of the property, this is a ‘time-limited’ interest becoming shorter every day. your lease will normally be granted for a set period of time , usually 99 or 125 years, although we have come across longer and shorter terms in Ramsey. Clearly, the period of lease left shortens over time. This may pass by relatively unnoticed when the flat or house has to be disposed of or re-mortgaged. The shorter the lease the lower the value of the property and the more it will cost to extend the lease. Eligible leaseholders in Ramsey have the right to extend the lease for an additional 90 years under legislation. You should give careful consideration before putting off your Ramsey lease extension. Holding off that expense now simply increases the price you will eventually incur to extend your lease

An extended lease has roughly the same value as a freehold

Leasehold premises in Ramsey with in excess of one hundred years outstanding 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 home. In such circumstances there is often little to be gained by purchasing the freehold unless savings on ground rent and estate charges warrant it.

Lenders may not finance a property with a short lease

Most high street banks are tightening their criteria and a meaningful number now want flats to have a minimum of sixty if not seventy years left at the end of the mortgage. Given that a number of flats in Ramsey were built in the 1950s, 1960s and 1970s as a result many now require lease extensions if they wish to obtain a mortgage.

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.
Birmingham Midshires Minimum 70 years from the date of the mortgage.
Lloyds TSB Scotland Minimum 70 years from the date of the mortgage.
Nationwide Building Society - Our minimum unexpired lease term is 55 years, except where lending is over 85% of the purchase price/valuation on a second hand flat, in which case our minimum unexpired term is 90 years.
- There must be at least 30 years remaining at the end of the mortgage term (regardless of the length of lease at the start).

Where the unexpired lease term is different to that recorded on the mortgage offer, the following clarifies if we need to be informed:

Second hand property:
- If the unexpired lease term on the offer is 85 years or more - only advise us if the actual lease term is less than 85 years
- if the unexpired lease term on the offer is less than 85 years – advise us if the actual lease term is different than reported
- For equity share applications - advise us if the actual lease term is different than reported on the offer
- Where lending is over 85% of the purchase price/valuation on a second hand flat and the unexpired lease term on the offer is 90 years or more - only advise us if the actual lease term is less than 90 years.

New build property:
- If the unexpired lease term stated on the offer is 125 years (flat) / 250 years (house) or more - only advise us if the actual lease term is less than 125 years (flat) / 250 years (house)
- For equity share applications - always advise us if the actual lease term is different than reported on the offer

Lease terms such as ground rent and event fees must be reasonable at all times during the term of the lease and adhere to our requirements below. If you’re unsure as to whether the terms of a lease are unreasonable or onerous, please refer the details to us in plain English for Valuer consideration. If the potentially onerous terms are in relation to the ground rent please include the current ground rent figure per annum, how often it will be reviewed and the price structure it will be reviewed against. See the guidance below.

SECOND HAND PROPERTIES

Unacceptable - advise Issuing Office (Will be declined):
- Unexpired lease term less than 55 years
- Unexpired lease term less than 90 years where we are lending more than 85% of the purchase price/valuation on a second hand flat
- Less than 30 years remaining at the end of the mortgage term
- Ground Rent greater than 0.5% of the property value
- Ground Rent doubles less than every 20 years (e.g. doubles every 5, 10 or 15 years) - acceptable if doubles every 20 years or more
- Ground Rent is compounded RPI
- Ground Rent review period is less than or equal to 5 years

Refer to Issuing Office (Valuer will consider any impact on valuation figure and marketability):
- Unexpired lease term is 55 to 85 years
- Ground Rent greater than 0.1% and less than or equal to 0.5% of the property value
- Ground Rent escalation is linked to any indices greater than RPI
- Ground Rent escalation is linked to the value of the building*
- Ground Rent review period is greater than 5 and less than 10 years
- Event clauses exist for normal use e.g. changing the carpet, installing a TV aerial, etc
- Estate Rent Charges greater than £500 p/a (please provide details of what the charges cover)
- Service Charges greater than 1% of property value p/a (please provide details of what the charges cover)
- Anything that appears onerous, unusual or out of the ordinary

Acceptable (no requirement to advise Issuing Office):
- Unexpired lease term greater than 85 years (Minimum 90 years where we are lending more than 85% of the purchase price/valuation on a second hand flat)
- Ground Rent less than or equal to 0.1% of the property value
- Ground Rent review period greater than or equal to 10 years
- Ground Rent escalation less than or equal to RPI

NEW BUILD PROPERTIES (includes office conversions)

Unacceptable - advise Issuing Office (Will be declined)
- Unexpired lease term less than 125 years on a new build flat or less than 250 years on a new build house (does not apply to Shared Ownership)
- Any lease which is subject to a Ground Rent (or Annual Rent) being charged which is more than on a peppercorn basis
- Any lease which is subject to a Ground Rent (or Annual Rent) being charged which is more than on a peppercorn basis

Refer to Issuing Office (Valuer will consider any impact on valuation figure and marketability):
- Event clauses exist for normal use e.g. changing the carpet, installing a TV aerial etc
- Estate Rent Charges greater than £500 p/a (please provide details of what the charges cover)
- Service Charges greater than 1% of property value p/a (please provide details of what the charges cover)
- Anything else appears onerous, unusual or out of the ordinary

Acceptable (no requirement to advise Issuing Office):
- Unexpired lease term greater than or equal to 125 years on a new build flat or greater than or equal to 250 years on a new build house
- A lease subject to a peppercorn Ground Rent (Annual Rent) charges

For the avoidance of doubt, any New Build properties completed but not sold pre-30 June 2022 will only be acceptable if the Lease conforms to the above guidance.

* Where the Ground Rent escalation is linked to the value of the building, please provide the following:
- How is the value of the block/unit currently calculated and if the assessment relates to the block(s), how is the Ground Rent calculated/apportioned per property?
- The current valuation and Ground Rent for each unit
- What is the mechanism for future valuations of the block and how is the Ground Rent calculated/apportioned?
- What is the right of appeal? And is this a documented process within the lease?
- Who bears the cost of the valuation (and appeal) process?
- Confirmation the review period is not less than twenty years.

Lease Extensions

We require all Lease Extensions to be completed under the Leasehold Reform Housing and Urban Development Act 1993 and to meet the above criteria as a minimum. Where you become aware that it does not meet these requirements, please refer to Issuing Office.
TSB Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption.

Why use us for your lease extension in Ramsey?

Regardless of whether you are a tenant or a landlord in Ramsey,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 experience and the close ties they enjoy with Ramsey valuers.

Ramsey Lease Extension Example Cases:

Elijah, Ramsey, Cambridgeshire

During the course of the last few months Elijah, started to get near to the 80-year mark with the lease on his purpose- built apartment in Ramsey. Having purchased his property twenty years previously, the length of the lease was of no significance. As luck would have it, he became aware that he needed to take action soon on Extending the lease. Elijah extended the lease at the eleventh hour in July. Elijah and the freeholder via the management company ultimately agreed on a premium of £5,500 . If the lease had dipped below eighty years, the amount would have become more costly by at least £900.

Ramsey case:

In 2012 we were contacted by Mr and Mrs. W King who, having moved into a studio flat in Ramsey in August 2002. The question was if we could estimate the premium could be for a ninety year extension to my lease. Identical homes in Ramsey with a long lease were in the region of £200,000. The mid-range amount of ground rent was £50 collected every twelve months. The lease terminated on 26 October 2101. Having 77 years unexpired we calculated the premium to the freeholder to extend the lease to be within £8,600 and £9,800 exclusive of costs.

Ramsey case:

In 2013 we were e-mailed by Mr and Mrs. Y Norbert who, having owned a newly refurbished apartment in Ramsey in April 1998. We are asked if we could approximate the premium could be for a 90 year lease extension. Comparative flats in Ramsey with a long lease were valued around £260,200. The average amount of ground rent was £65 invoiced monthly. The lease end date was on 6 October 2090. Considering the 66 years left we approximated the premium to the freeholder for the lease extension to be within £15,200 and £17,600 exclusive of professional charges.