The value of Caerwent leasehold residential property falls as the lease term becomes shorter and this will have an impact on its saleability. The cost of extending the lease can increase materialy once the remaining term is less than eighty years
Leasehold properties in Caerwent with more than 100 years outstanding on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your property. In such circumstances there is often little upside in purchasing the freehold unless savings on ground rent and maintenance charges justify 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; |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
Using our service gives you enhanced control over the value of your Caerwent leasehold, as your property will be more valuable and marketable in respect of lease length should you wish to sell. The conveyancing solicitors that we work with have a wealth of experience of handling many hundreds of lease extensions or freehold purchase transactions.
Jude owned a conversion flat in Caerwent being sold with a lease of a few days over fifty eight years remaining. Jude on an informal basis contacted his landlord a well known local-based freehold company for a lease extension. The freeholder was keen to grant an extension on non-statutory terms taking the lease to 125 years subject to a new rent initially set at £200 per annum and increase every twenty five years thereafter. No ground rent would be payable on a lease extension were Jude to invoke his statutory right. Jude obtained expert legal guidance and secured an acceptable deal without resorting to tribunal and readily saleable.
Dr Connor Carter bought a one bedroom apartment in Caerwent in July 2000. The dilemma was if we could estimate the compensation to the landlord would be for a ninety year extension to my lease. Comparative flats in Caerwent with a long lease were in the region of £198,800. The average ground rent payable was £55 billed annually. The lease ran out on 3 September 2080. Having 55 years as a residual term we estimated the compensation to the landlord for the lease extension to be between £33,300 and £38,400 plus fees.
In 2012 we were contacted by Mr and Mrs. P Moore who, having moved into a basement apartment in Caerwent in November 1996. We are asked if we could approximate the price could be for a ninety year lease extension. Comparable premises in Caerwent with an extended lease were worth £300,000. The average amount of ground rent was £50 invoiced per annum. The lease concluded on 27 May 2100. Considering the 75 years unexpired we estimated the premium to the freeholder to extend the lease to be within £9,500 and £11,000 plus professional charges.