Unfortunately that a Ongar residential lease is a wasting asset. As the lease term reduces so does the value of the property. The extent of this is taken for granted in the early years due to the depreciation being disguised by increases in the Ongar property market.Once your lease gets to 85ish years, you need to start thinking about a lease extension. If lease term drops below 80 years, you will end up paying half of the property's 'marriage value' on top of the usual cost of the lease extension to the landlord. Marriage value is the amount of additional value that a lease extension will add the property Most flat owners in Ongar will be able to extend under the legislation; however a lawyer should be able to confirm if you are eligibility. In some situations you may not be entitled. There are also strict timeframes and procedures to follow once the process is instigated and you will need to be guided by your lawyer from beginning to end of the formalities.
It is generally accepted that a residential leasehold with more than 100 years unexpired lease term is worth roughly the equivalent as a freehold. Where an additional 90 years added to any lease with more than 30 years remaining, the residence will be worth the same as a freehold for decades to come.
| 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Regardless of whether you are a tenant or a landlord in Ongar,the lease extension solicitors that we work with will always be willing to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Ongar valuers.
Following protracted discussions with the freeholder of her first floor apartment in Ongar, Amber commenced the lease extension process just as her lease was coming close to the all-important 80-year threshold. The transaction completed in October 2008. The landlord’s charges were kept to an absolute minimum.
Ms Kayleigh Roberts took over the lease of a one bedroom flat in Ongar in March 2000. The question was if we could shed any light on how much (approximately) premium would be for a ninety year lease extension. Similar premises in Ongar with a long lease were worth £255,000. The mid-range ground rent payable was £50 collected quarterly. The lease terminated on 16 July 2095. Given that there were 70 years remaining we calculated the compensation to the freeholder for the lease extension to be within £10,500 and £12,000 not including expenses.
Last Summer we were approach by Mr and Mrs. J Alexander , who purchased a ground floor flat in Ongar in February 1999. We are asked if we could shed any light on how much (approximately) compensation to the landlord would be for a 90 year extension to my lease. Comparative residencies in Ongar with a long lease were valued around £246,800. The mid-range ground rent payable was £60 invoiced yearly. The lease lapsed in 2075. Taking into account 50 years left we approximated the compensation to the landlord to extend the lease to be within £44,700 and £51,600 exclusive of costs.