The basic rule is, all other things holding equal, the shorter the lease the more expensive the premium. Qualifying leaseholders in Ely may extend the lease for an additional 90 years under the 1993 Leasehold Reform Act. Do think carefully before delaying your Ely lease extension. Postponing the costs now simply increases the premium you will eventually have to pay to extend the lease.
Leasehold properties in Ely with more than 100 years remaining on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your property. In such situations there is often little upside in buying the reversionary interest unless savings on ground rent and estate charges merit 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Yorkshire 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. |
The conveyancers that we work with undertake Ely 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.
Eli owned a studio apartment in Ely being sold with a lease of just over 61 years unexpired. Eli informally spoke with his landlord a well known Manchester-based freehold company for a lease extension. The freeholder was prepared to grant an extension on non-statutory terms taking the lease to 125 years subject to a new rent to start with set at £100 per annum and doubled every twenty five years thereafter. Ordinarily, ground rent would not be due on a lease extension were Eli to invoke his statutory right. Eli obtained expert legal guidance and was able to make a more informed decision and deal with the matter and ending up with a market value flat.
Last Summer we were approach by Ms K Bertrand , who moved into a one bedroom flat in Ely in February 2007. We are asked if we could shed any light on how much (approximately) compensation to the landlord would be for a ninety year lease extension. Comparable flats in Ely with a long lease were valued around £243,000. The mid-range amount of ground rent was £65 collected every twelve months. The lease elapsed in 2088. Taking into account 63 years left we estimated the compensation to the freeholder to extend the lease to be between £20,000 and £23,000 not including professional charges.
In 2011 we were approached by Mr and Mrs. T Edwards who, having moved into a studio apartment in Ely in May 2004. The dilemma was if we could estimate the compensation to the landlord would be to prolong the lease by 90 years. Similar homes in Ely with an extended lease were valued about £181,600. The mid-range amount of ground rent was £55 billed yearly. The lease expired in 2077. Having 52 years remaining we estimated the compensation to the landlord for the lease extension to be within £30,400 and £35,200 exclusive of expenses.