If you are facing a significant premium because your lease in Gamlingay has dropped toward the 80-year mark, your previous lawyer may be at fault. Our panel of experts specialise in recovering lease extension costs from negligent firms who failed to protect your investment.
Why you should commence your Gamlingay lease extension today:
Increase your lease and increase your Gamlingay property value
Gamlingay leases on residential properties are gradually diminishing in value. The shorter the remaining lease term becomes, the less it is worth – and accordingly any extension of the lease gets more expensive. Most owners of residential leasehold property in Gamlingay enjoy rights under legislation to extend the terms of their leases. Where you are a leasehold owner in Gamlingay you must see if your lease has between 70 and ninety years remaining. There are good reasons why a Gamlingay flat owner with a lease having around 80 years remaining should take action to make sure that a lease extension is actioned without delay
An extended lease has roughly the same value as a freehold
Leasehold properties in Gamlingay with over 100 years left on the lease are often 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 to be gained by purchasing the freehold unless savings on ground rent and service charges merit it.
Lending institutions will not lend on a short lease
Mortgage lenders have set criteria when lending funds secured on leasehold property. Some will simply refuse lend at all once the residual lease term goes beneath a specified unexpired lease term. Many Mortgage lenders will not regard property with an unexpired below seventy years as adequate security. As well as this being important when selling, it is also relevant where you are seeking to remortgage your Gamlingay home.
| Lender |
Requirement
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|---|
| Bank of Scotland |
Minimum 70 years from the date of the mortgage.
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| Godiva Mortgages |
A minimum of 70 years unexpired lease at completion for all scheme types apart from Lifetime Mortgages (Equity Release), which require a minimum unexpired term of 80 years at completion.
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| Halifax |
Minimum 70 years from the date of the mortgage.
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| Skipton Building Society |
85 years from the date of completion of the mortgage
For Buy to Let cases:
- lettings must not breach any of the lessee’s covenants; and
- consent of the lessor to lettings must be obtained if necessary
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| The Mortgage Works |
Minimum unexpired lease term is 70 years with 30 years remaining at the end of the mortgage term.
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
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 70 years
- 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 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 70 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 1.0% 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
- 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
- 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 reviewed and altered on any review basis or methodology
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 1.0% 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 a proposed Lease Extension does not meet these requirements, however you feel that this is in the best interest for our mutual client, please refer all details to the Issuing Office for us to consider.
Please ensure that all lender enquiries are submitted (with full documentation/requirements) at least 2 weeks prior to exchange to allow sufficient time for review and decisioning.
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What makes us experts in Gamlingay lease extensions?
Using our service will provide you better control over the value of your Gamlingay leasehold, as your property will be more valuable and saleable in respect of lease length should you want to sell.
The lawyers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Gamlingay Lease Extension Case Studies:
Reuben, Gamlingay, Cambridgeshire,
Reuben owned a conversion apartment in Gamlingay on the market with a lease of a little over fifty eight years unexpired. Reuben on an informal basis contacted his landlord a well known local-based freehold company and enquired on a premium to extend the lease. The freeholder was prepared to grant an extension on non-statutory terms taking the lease to 125 years on the basis of a new rent initially set at £100 per annum and doubled every 25 years thereafter. No ground rent would be due on a lease extension were Reuben to exercise his statutory right. Reuben procured expert advice and was able to make an informed judgement and deal with the matter and ending up with a market value flat.
Gamlingay case:
In 2014 we were contacted by Mr and Mrs. L Ali who, having owned a one bedroom flat in Gamlingay in January 2002. We are asked if we could approximate the compensation to the landlord would be to extend the lease by an additional years. Identical homes in Gamlingay with 100 year plus lease were in the region of £250,000. The mid-range amount of ground rent was £50 invoiced monthly. The lease finished in 2095. Given that there were 69 years unexpired we estimated the premium to the freeholder to extend the lease to be within £9,500 and £11,000 not including fees.
Gamlingay case:
Mr and Mrs. B Kelly owned a first floor apartment in Gamlingay in February 2005. We are asked if we could estimate the premium could be to extend the lease by 90 years. Similar homes in Gamlingay with an extended lease were in the region of £290,000. The mid-range ground rent payable was £60 collected yearly. The lease terminated in 2106. Having 80 years remaining we estimated the compensation to the landlord for the lease extension to be within £12,400 and £14,200 exclusive of expenses.