On the balance of probabilities where you own a flat in Cathays you actually own a long leasehold interest over your property
It is conventional wisdom that a property with more than one hundred years unexpired lease term is worth roughly the same as a freehold. Where an additional ninety years added to any lease with more than 30 years left, the residence will be equivalent in value to a freehold for many years in the future.
| 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. |
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage should be declined (see exception below). Leases with greater than 70 years but fewer than 85 years remaining must be referred to issuing office. Leases with fewer than 70 years should only be referred to the issuing office where the following scenario applies, as discretion may be applied subject to bank approval: • Property is located in any of the following prestigious developments: Cadogan, Crown, Grosvenor, Howard de Walden, Portman or Wellcome Trust Estates in Central London AND • The value of the property subject to the short remaining term is £500,000 or more AND • The loan to value does not exceed 90% for purchases, 90% like for like re-mortgages, 80% for re-mortgages with any element of capital raising and 80% for existing Barclays mortgage borrowers applying for additional borrowing; |
| 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. |
Regardless of whether you are a tenant or a landlord in Cathays,the lease extension experts that we work with will always be prepared to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with Cathays valuers.
Last October Isaac, came dangerously close to the 80-year mark with the lease on his one bedroom flat in Cathays. Having bought his home 18 years previously, the length of the lease was of little importance. Thankfully, it dawned on him that he needed to take action soon on Extending the lease. Isaac was able to extend his lease just under the wire last June. Isaac and the freeholder via the management company eventually agreed on sum of £5,000 . If he had missed the deadline, the premium would have become more exhorbitant by at least £900.
In 2012 we were contacted by Dr T Williams who, having purchased a one bedroom apartment in Cathays in February 2010. The question was if we could approximate the compensation to the landlord would be to extend the lease by ninety years. Similar properties in Cathays with 100 year plus lease were in the region of £265,000. The average ground rent payable was £50 collected monthly. The lease ran out on 21 February 2098. Given that there were 73 years left we calculated the compensation to the landlord to extend the lease to be between £9,500 and £11,000 not including fees.
Dr Jamie Wood purchased a garden flat in Cathays in July 1995. We are asked if we could approximate the price would likely be to prolong the lease by ninety years. Comparable flats in Cathays with a long lease were valued about £264,000. The average ground rent payable was £60 invoiced yearly. The lease came to a finish on 8 September 2078. Having 53 years as a residual term we approximated the premium to the landlord to extend the lease to be within £37,100 and £42,800 exclusive of fees.