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 your lease becomes 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 would be well advised to investigate if your lease has between 70 and ninety years remaining. In particular once the remaining lease term slips under 80 years, the cost of any lease extension increases dramatically as part of the premium you will incur is what is known as a marriage value
Leasehold properties in Gamlingay with over 100 years remaining 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 to be gained by buying the freehold unless savings on ground rent and service 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. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must also be not less than 75 years at the outset of the mortgage. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Irrespective of whether you are a tenant or a landlord in Gamlingay,the lease extension lawyers that we work with will always be prepared to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with Gamlingay valuers.
Last Summer Archie, started to get near to the eighty-year threshold with the lease on his two bedroom flat in Gamlingay. In buying his flat two decades ago, the length of the lease was of minimal significance. Fortunately, he recognised he needed to take action soon on a lease extension. Archie was able to extend his lease just ahead of time in March. Archie and the landlord ultimately settled on the final figure of £6,000 . If he not met the deadline, the price would have escalated by at least £925.
In 2012 we were phoned by Dr Edward Bernard who, having acquired a newly refurbished flat in Gamlingay in January 2009. The dilemma was if we could estimate the premium would likely be for a 90 year extension to my lease. Comparable flats in Gamlingay with a long lease were worth £227,800. The average amount of ground rent was £45 invoiced yearly. The lease elapsed in 2090. Considering the 65 years as a residual term we estimated the premium to the freeholder for the lease extension to be between £13,300 and £15,400 not including professional charges.
Last Christmas we were phoned by Mr and Mrs. A Girard , who bought a purpose-built apartment in Gamlingay in May 1996. We are asked if we could estimate the price would likely be for a ninety year lease extension. Comparative homes in Gamlingay with 100 year plus lease were worth £270,000. The average ground rent payable was £55 billed annually. The lease expiry date was on 4 February 2101. Taking into account 76 years outstanding we estimated the premium to the freeholder to extend the lease to be within £9,500 and £11,000 not including legals.