Cardiff Bay 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 becomes more expensive. Legislation has been in place for sometime now allowing qualifying Cardiff Bay residential leaseholders to extend the terms of long leases. Where you are a leasehold owner in Cardiff Bay you would be well advised to check if your lease has between 70 and 90 years remaining. In particular once the remaining lease term slips under eighty years, the amount payable for any lease extension sharply increases as an element of the premium you will incur is what is known as a marriage value
Leasehold properties in Cardiff Bay with over 100 years unexpired on the lease are often referred to as ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your home. In such situations there is often little to be gained by buying the freehold unless savings on ground rent and maintenance charges merit it.
|Bank of Scotland||Minimum 70 years from the date of the mortgage.|
|Barclays plc||Mortgage term plus 25 years provided that leases of less than 85 years are be referred to us for approval.|
|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.|
|Skipton Building Society|| 85 years from the date of completion of the mortgage|
For Buy to Let cases:
- lettings must not breach any of the lessee’s covenants; and
- consent of the lessor to lettings must be obtained if necessary
|Royal Bank of Scotland||Mortgage term plus 30 years. For a Lifetime Mortgage, the term must be no less than 150 years minus the age of the Borrower.|
The conveyancers that we work with undertake Cardiff Bay lease extensions and help protect your position. A lease extension can be arranged to be completed to coincide with a change of ownership so the costs of the lease extension are paid for using part of the sale proceeds. You really do need expert legal advice in this difficult and technical area of law. The lawyer we work with provide it.
Last October Arthur, started to get close to the 80-year mark with the lease on his purpose- built flat in Cardiff Bay. Having purchased his home 19 years previously, the lease term was of little importance. As luck would have it, he recognised he needed to take steps soon on Extending the lease. Arthur was able to extend his lease just ahead of time last September. Arthur and the freeholder via the managing agents in the end agreed on a premium of £5,000 . If the lease had slid to less than eighty years, the sum would have become more costly by a minimum £925.
Last May we were e-mailed by Mrs Millie Lewis , who moved into a newly refurbished flat in Cardiff Bay in May 1998. The dilemma was if we could shed any light on how much (roughly) premium would likely be for a 90 year lease extension. Similar residencies in Cardiff Bay with 100 year plus lease were in the region of £285,000. The mid-range ground rent payable was £55 invoiced yearly. The lease ended in 2102. Having 80 years outstanding we estimated the premium to the freeholder for the lease extension to be between £12,400 and £14,200 plus professional charges.
In 2014 we were approached by Mr Y Collins who, having took over the lease of a one bedroom apartment in Cardiff Bay in March 2000. The dilemma was if we could approximate the price would likely be to extend the lease by 90 years. Comparable flats in Cardiff Bay with a long lease were in the region of £200,800. The average amount of ground rent was £65 invoiced every twelve months. The lease ended in 2082. Having 60 years unexpired we approximated the compensation to the freeholder for the lease extension to be within £20,900 and £24,200 exclusive of professional charges.