The closer a residential lease in Cathays gets to zero years unexpired, the more it reduces the value of the property. Where the lease has, beyond one hundred years to run then this decrease may be negligible nevertheless there will become a stage when a lease has under than 80 years unexpired as part of the premium you will incur is what is known as a marriage value. This could be significant. It is the primary reason why you should extend the lease without delay. The majority of flat owners in Cathays will meet the qualifying criteria; however a lawyer should be able to confirm whether you are eligible for a lease extension. In certain situations you may not qualify, the most frequent reason being that you have not been the owner of the property for two years.
It is conventional wisdom that a residential leasehold with in excess of one hundred years remaining is worth roughly the equivalent as a freehold. Where an further ninety years added to any lease with more than 45 years unexpired, the residence will be worth the same as 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 are not acceptable. 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; |
| Santander | You must report the unexpired lease term to us and await our instructions if: 1. the unexpired term assumed by our valuer is between 55 and 82 years, but the actual unexpired term differs by more than one year (whether longer or shorter); or 2. the unexpired term assumed by our valuer is more than 82 years but the actual unexpired term is less than 82 years; or 3. no valuation report is provided However, we will not accept a lease where on expiry of the mortgage: (i) less than 50 years remain and all or part of the loan is repaid on an interest-only basis: or (ii) less than 30 years remain and the loan is repaid on a capital and interest basis We will accept a lease that has been extended under the provisions of the Leasehold Reform Act 1993 provided statutory compensation would be available to the leaseholder. |
| 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. |
Irrespective of whether you are a tenant or a freeholder in Cathays,the lease extension solicitors that we work with will always be prepared to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Cathays valuers.
Last October Jacob, started to get near to the eighty-year threshold with the lease on his first floor apartment in Cathays. In buying his property two decades ago, the lease term was of no importance. As luck would have it, he recognised he would imminently be paying an escalated premium for Extending the lease. Jacob extended the lease just under the wire in January. Jacob and the freeholder eventually agreed on the final figure of £5,500 . If he had missed the deadline, the sum would have become more costly by a minimum £1,100.
In 2010 we were approached by Mr H David who, having was assigned a lease of a garden apartment in Cathays in April 2011. The question was if we could shed any light on how much (roughly) premium would likely be to extend the lease by ninety years. Comparative properties in Cathays with a long lease were valued around £245,000. The average ground rent payable was £50 billed yearly. The lease concluded in 2094. Taking into account 68 years remaining we calculated the compensation to the freeholder for the lease extension to be within £9,500 and £11,000 not including fees.
Last month we were approach by Dr J Sharif , who moved into a newly refurbished flat in Cathays in November 2001. We are asked if we could estimate the compensation to the landlord could be to prolong the lease by ninety years. Comparative properties in Cathays with an extended lease were in the region of £285,000. The mid-range amount of ground rent was £55 collected per annum. The lease finished on 6 October 2105. Taking into account 79 years unexpired we approximated the compensation to the freeholder for the lease extension to be between £13,300 and £15,400 not including costs.