Caldicot leases on residential properties are gradually losing value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of the lease gets more expensive. Legislation has been in place for sometime now allowing qualifying Caldicot residential leaseholders to extend the terms of long leases. Where you are a leasehold owner in Caldicot you should investigate if your lease has between seventy and ninety years left. There are compelling reasons why a Caldicot flat owner with a lease having around eighty years left should take steps to ensure that a lease extension is actioned without delay
It is generally considered that a property with more than one hundred years remaining is worth roughly the same as a freehold. Where an additional 90 years added to any lease with more than 35 years remaining, the residence will be equivalent in value to a freehold for decades to come.
| Lender | Requirement |
|---|---|
| Accord Mortgages | 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| 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. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
| 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. |
Regardless of whether you are a tenant or a freeholder in Caldicot,the lease extension solicitors 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 Caldicot valuers.
During the course of the last few months Finn, started to get close to the eighty-year mark with the lease on his garden flat in Caldicot. Having bought his flat twenty years ago, the lease term was of little relevance. As luck would have it, he became aware that he would imminently be paying an escalated premium for Extending the lease. Finn was able to extend his lease just under the wire in June. Finn and the freeholder via the managing agents ultimately agreed on an amount of £5,500 . If the lease had gone lower than 80 years, the premium would have escalated by a minimum £950.
In 2011 we were contacted by Mr and Mrs. A Moreau who, having completed a purpose-built flat in Caldicot in April 1995. We are asked if we could shed any light on how much (roughly) premium could be to prolong the lease by an additional years. Identical properties in Caldicot with an extended lease were valued around £225,400. The average amount of ground rent was £45 collected every twelve months. The lease ran out in 2089. Having 64 years as a residual term we approximated the compensation to the freeholder to extend the lease to be between £16,200 and £18,600 plus professional charges.
In 2011 we were e-mailed by Ms Jennifer Hernández who, having completed a recently refurbished flat in Caldicot in July 2002. We are asked if we could shed any light on how much (approximately) price would be for a ninety year extension to my lease. Comparative premises in Caldicot with an extended lease were worth £270,000. The average ground rent payable was £55 billed quarterly. The lease lapsed on 23 November 2100. Given that there were 75 years remaining we calculated the premium to the freeholder for the lease extension to be within £9,500 and £11,000 exclusive of costs.