For anyone whose Cardigan flat is held on a long lease, our message is clear – if no remedial action is taken, the property will eventually revert to the freeholder, leaving you empty-handed. The fewer the years remaining the less it is worth and the more it will cost to obtain a lease extension.
It is generally accepted that a property with over 100 years remaining is worth roughly the same as a freehold. Where an additional 90 years added to all but the shortest lease, the property 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. |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Chelsea 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. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must also be not less than 75 years at the outset of the mortgage. |
| 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. |
Using our service will provide you enhanced control over the value of your Cardigan leasehold, as your property will be more valuable and marketable in relation to the lease length should you want to sell. The lawyers that we work with have a wealth of experience of handling many hundreds of lease extensions or freehold purchase transactions.
Jasper was the the leasehold proprietor of a conversion flat in Cardigan being marketed with a lease of just over 72 years outstanding. Jasper informally spoke with his landlord being a well known Manchester-based freehold company and enquired on a premium to extend the lease. The freeholder was keen to grant an extension on non-statutory terms taking the lease to 125 years subject to a new rent to start with set at £150 per annum and increase every twenty five years thereafter. No ground rent would be payable on a lease extension were Jasper to invoke his statutory right. Jasper obtained expert legal guidance and secured satisfactory deal informally and sell the flat.
Last Autumn we were approach by Dr Charlie Moore , who purchased a basement flat in Cardigan in July 2000. We are asked if we could shed any light on how much (approximately) premium would be to prolong the lease by 90 years. Identical premises in Cardigan with a long lease were worth £183,600. The mid-range ground rent payable was £65 collected quarterly. The lease terminated on 7 February 2082. Considering the 57 years outstanding we approximated the compensation to the landlord to extend the lease to be between £28,500 and £33,000 not including professional charges.
Dr U Anderson acquired a first floor flat in Cardigan in October 2007. We are asked if we could approximate the compensation to the landlord would likely be for a 90 year extension to my lease. Similar premises in Cardigan with 100 year plus lease were worth £250,000. The mid-range ground rent payable was £50 invoiced quarterly. The lease terminated on 11 August 2093. Considering the 68 years unexpired we calculated the compensation to the freeholder to extend the lease to be between £9,500 and £11,000 exclusive of legals.