The value of Caldicot 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 materialy once the unexpired lease term is below than eighty years
Leasehold residencies in Caldicot with in excess of one hundred years left on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your premises. In such circumstances there is often little to be gained by purchasing the reversionary interest unless savings on ground rent and service charges merit it.
| Lender | Requirement |
|---|---|
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
| 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 will provide you increased control over the value of your Caldicot leasehold, as your property will be more valuable and saleable in terms of lease length should you wish to sell. The lawyers that we work with have a in-depth market knowledge handling many hundreds of lease extensions or freehold purchase transactions.
Alfie owned a 2 bedroom apartment in Caldicot on the market with a lease of fraction over sixty years remaining. Alfie informally approached his landlord a well known London-based freehold company and enquired on a premium to extend the lease. The freeholder was keen to agree an extension on non-statutory terms taking the lease to 125 years on the basis of an increased rent to £200 annually. Ordinarily, ground rent would not be payable on a lease extension were Alfie to invoke his statutory right. Alfie procured expert advice and was able to make an informed decision and deal with the matter and readily saleable.
In 2009 we were called by Mr and Mrs. P Bernard who, having took over the lease of a recently refurbished apartment in Caldicot in November 2011. We are asked if we could estimate the premium would likely be for a ninety year lease extension. Comparable properties in Caldicot with a long lease were valued about £256,600. The mid-range ground rent payable was £60 billed annually. The lease lapsed on 8 October 2077. Taking into account 52 years as a residual term we calculated the premium to the landlord to extend the lease to be between £39,000 and £45,000 plus legals.
Last Autumn we were approach by Mr I Norbert , who moved into a garden flat in Caldicot in April 2004. The dilemma was if we could approximate the premium would be for a ninety year lease extension. Similar homes in Caldicot with an extended lease were in the region of £218,000. The mid-range amount of ground rent was £45 invoiced yearly. The lease expired on 6 September 2088. Given that there were 63 years unexpired we calculated the compensation to the landlord to extend the lease to be between £17,100 and £19,800 plus costs.