Unfortunately that a Caerleon residential lease is a deteriorating asset. The lease value reduces in proportion to its lease length. The extent of this is not fully appreciated in the early years due to the loss of value being disguised by increases in the Caerleon property prices.Once your lease gets to 85ish years, you should start considering a lease extension. If the number of years remaining slips under eighty 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. The marriage fee is the amount of extra value that a lease extension will add the property Most leasehold owners in Caerleon will be able to extend under the legislation; however a conveyancing solicitor should be able to clarify if you qualify for an extension. In some situations you may not qualify. There are also strict timeframes and procedures to be adhered to once the process is initiated and you will need to be guided by your conveyancing solicitor from beginning to end of the process.
It is generally considered that a residential leasehold with over one hundred years unexpired lease term is worth approximately the equivalent as a freehold. Where an additional 90 years added to all but the shortest lease, the premises will be equivalent in value to a freehold for decades to come.
| Lender | Requirement |
|---|---|
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage are not acceptable. 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. |
| Coventry Building Society | 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. |
| Santander | You must report the unexpired lease term to us and await our instructions if: 1. the unexpired term assumed by our valuer is between 55 and 82 years, but the actual unexpired term differs by more than one year (whether longer or shorter); or 2. the unexpired term assumed by our valuer is more than 82 years but the actual unexpired term is less than 82 years; or 3. no valuation report is provided However, we will not accept a lease where on expiry of the mortgage: (i) less than 50 years remain and all or part of the loan is repaid on an interest-only basis: or (ii) less than 30 years remain and the loan is repaid on a capital and interest basis We will accept a lease that has been extended under the provisions of the Leasehold Reform Act 1993 provided statutory compensation would be available to the leaseholder. |
| 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. |
Retaining our service gives you enhanced control over the value of your Caerleon leasehold, as your property will be more valuable and saleable in respect of lease length should you wish to sell. The conveyancers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Eliot was the the leasehold proprietor of a studio flat in Caerleon on the market with a lease of fraction over 72 years unexpired. Eliot informally spoke with his landlord a well known London-based freehold company and enquired on a premium to extend the lease. The freeholder indicated a willingness to extend the lease to 125 years on the basis of a rise in the rent to £50 per annum. Ordinarily, ground rent would not be due on a lease extension were Eliot to exercise his statutory right. Eliot procured expert advice and was able to make a more informed judgement and handle with the matter and sell the property.
Dr I Cox was assigned a lease of a studio apartment in Caerleon in August 1995. We are asked if we could approximate the price could be to extend the lease by 90 years. Identical properties in Caerleon with an extended lease were worth £216,000. The average amount of ground rent was £60 invoiced annually. The lease ended on 2 January 2084. Taking into account 58 years unexpired we estimated the compensation to the freeholder to extend the lease to be between £28,500 and £33,000 not including expenses.
Last Winter we were e-mailed by Ms Zoe Gómez , who owned a one bedroom flat in Caerleon in October 2008. We are asked if we could approximate the compensation to the landlord would be to extend the lease by a further 90 years. Comparable flats in Caerleon with an extended lease were valued around £200,000. The mid-range ground rent payable was £50 collected every twelve months. The lease came to a finish in 2104. Given that there were 78 years outstanding we calculated the premium to the landlord to extend the lease to be within £8,600 and £9,800 exclusive of fees.