Caldicot leases on residential properties are gradually losing value. The shorter the remaining lease term becomes, the less it is worth – and accordingly 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. If you are a leasehold owner in Caldicot you should see if your lease has between seventy and 90 years left. In particular once the remaining lease term slips under 80 years, the cost of any lease extension sharply increases as part of the premium you will incur is what is known as a marriage value
It is conventional wisdom that a residential leasehold with more than one hundred years unexpired lease term is worth approximately the equivalent as a freehold. Where an further 90 years added to any lease with more than 35 years left, the premises will be worth the same as a freehold for decades to come.
| Lender | Requirement |
|---|---|
| Godiva Mortgages | 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 30 years plus the term of the mortgage at the outset of the mortgage. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| 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. |
Irrespective of whether you are a tenant or a landlord in Caldicot,the lease extension experts that we work with will always be happy to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with Caldicot valuers.
Last Autumn Luke, came seriously near to the eighty-year threshold with the lease on his purpose- built flat in Caldicot. In buying his flat 19 years previously, the unexpired term was of no interest. Luckily, he noticed he needed to take action soon on a lease extension. Luke extended the lease just under the wire last August. Luke and the landlord subsequently settled on an amount of £5,500 . If the lease had dipped to less than 80 years, the premium would have escalated by at least £850.
Dr Jason Davis moved into a studio flat in Caldicot in March 2008. The question was if we could shed any light on how much (roughly) compensation to the landlord would be to extend the lease by an additional years. Comparable properties in Caldicot with an extended lease were in the region of £250,000. The average ground rent payable was £50 billed per annum. The lease came to a finish in 2095. Taking into account 69 years remaining we estimated the compensation to the freeholder for the lease extension to be between £9,500 and £11,000 plus legals.
In 2009 we were called by Mr Luca Scott who, having completed a purpose-built flat in Caldicot in May 2011. We are asked if we could shed any light on how much (approximately) compensation to the landlord could be to extend the lease by an additional years. Identical premises in Caldicot with 100 year plus lease were worth £285,000. The average amount of ground rent was £55 invoiced monthly. The lease expired on 10 May 2106. Having 80 years remaining we estimated the premium to the landlord to extend the lease to be between £12,400 and £14,200 exclusive of professional charges.