The value of Ely leasehold residential property falls as the lease term becomes shorter and this will have an impact on its saleability. The expense of a lease extension can increase significantly once the remaining term is below than 80 years
It is generally accepted that a property with over 100 years remaining is worth approximately the same as a freehold. Where an additional 90 years added to any lease with more than 30 years left, the residence will be equivalent in value to a freehold for decades to come.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| 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; |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| 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 |
Lease extensions in Ely can be a difficult process. We recommend you obtain professional help from a conveyancing solicitor and surveyor with experience in lease extensions.
We provide you with an expert from a selection of lease extension solicitors, which ensures a targeted and efficient service as you have a dedicated port of call with an individual lawyer. Our lease extension solicitors have in-depth market knowledge dealing with Ely lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
Riley owned a studio flat in Ely on the market with a lease of fraction over 72 years outstanding. Riley on an informal basis approached his freeholder being a well known local-based freehold company and enquired on a premium to extend the lease. The landlord was prepared to grant an extension on non-statutory terms taking the lease to 125 years subject to an increased rent to £200 yearly. Ordinarily, ground rent would not be due on a lease extension were Riley to invoke his statutory right. Riley obtained expert legal guidance and secured an acceptable resolution informally and sell the flat.
Mr and Mrs. D Girard took over the lease of a garden flat in Ely in July 1999. The question was if we could shed any light on how much (roughly) price could be for a 90 year extension to my lease. Comparable flats in Ely with a long lease were valued around £233,200. The average ground rent payable was £60 invoiced annually. The lease termination date was in 2086. Having 61 years remaining we estimated the premium to the landlord to extend the lease to be within £22,800 and £26,400 plus expenses.
Last month we were called by Mr K Alexander , who took over the lease of a purpose-built flat in Ely in March 2009. The question was if we could approximate the price would be to extend the lease by a further 90 years. Comparable residencies in Ely with a long lease were valued about £171,800. The average amount of ground rent was £55 billed per annum. The lease expired on 2 October 2075. Considering the 50 years left we calculated the compensation to the freeholder for the lease extension to be within £33,300 and £38,400 exclusive of fees.