Cardigan residential property owned on a long lease is a depreciating asset as the leaseholder merely owns the property for a period of years.
Leasehold properties in Cardigan with more than one hundred years remaining 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 premises. In such situations there is often little to be gained by buying the freehold unless savings on ground rent and service charges justify it.
| 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. |
| 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. |
Retaining 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 conveyancing solicitors that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Leo owned a high value flat in Cardigan on the market with a lease of just over 61 years unexpired. Leo on an informal basis spoke with his landlord a well known London-based freehold company and enquired on a premium to extend the lease. The landlord indicated a willingness to grant an extension taking the lease to 125 years subject to a new rent to start with set at £150 per annum and increase every 25 years thereafter. Ordinarily, ground rent would not be payable on a lease extension were Leo to invoke his statutory right. Leo procured expert advice and secured satisfactory deal without resorting to tribunal and readily saleable.
Mr F Brown bought a basement flat in Cardigan in April 2001. We are asked if we could approximate the compensation to the landlord would be for a 90 year lease extension. Identical properties in Cardigan with an extended lease were valued about £250,000. The average ground rent payable was £50 collected yearly. The lease finished in 2094. Having 69 years outstanding we calculated the compensation to the freeholder to extend the lease to be between £9,500 and £11,000 exclusive of costs.
Dr K Petit bought a studio apartment in Cardigan in September 2005. We are asked if we could estimate the compensation to the landlord would be to prolong the lease by ninety years. Identical residencies in Cardigan with an extended lease were valued about £290,000. The mid-range amount of ground rent was £60 invoiced every twelve months. The lease came to a finish in 2105. Given that there were 80 years as a residual term we approximated the premium to the freeholder for the lease extension to be between £13,300 and £15,400 plus legals.