Cowbridge 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 Cowbridge residential leaseholders to extend the terms of long leases. Where you are a leasehold owner in Cowbridge you would be well advised to check if your lease has between seventy and ninety years remaining. In particular once the remaining lease term slips under eighty years, the amount payable for any lease extension increases dramatically as an element of the premium you will incur is what is known as a marriage value
Leasehold properties in Cowbridge with more than 100 years remaining on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your home. In such circumstances there is often little to be gained by purchasing the reversionary interest unless savings on ground rent and estate charges justify it.
| 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. |
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Lloyds TSB Scotland | Minimum 70 years from the date 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. |
Retaining our service will provide you increased control over the value of your Cowbridge leasehold, as your property will be more valuable and marketable in terms of lease length should you wish 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.
Dylan owned a 2 bedroom flat in Cowbridge being marketed with a lease of fraction over 59 years outstanding. Dylan informally spoke with his freeholder a well known Bristol-based freehold company for a lease extension. The freeholder was keen to agree an extension on non-statutory terms taking the lease to 125 years subject to a rise in the rent to £200 annually. No ground rent would be payable on a lease extension were Dylan to invoke his statutory right. Dylan procured expert advice and was able to make an informed judgement and deal with the matter and ending up with a market value flat.
In 2013 we were e-mailed by Ms D Sánchez who, having took over the lease of a one bedroom apartment in Cowbridge in November 1996. The question was if we could shed any light on how much (approximately) price could be for a ninety year lease extension. Comparable properties in Cowbridge with a long lease were in the region of £280,000. The mid-range ground rent payable was £55 invoiced annually. The lease lapsed in 2103. Having 77 years left we estimated the premium to the landlord to extend the lease to be within £13,300 and £15,400 plus expenses.
In 2010 we were phoned by Dr R Harris who, having purchased a basement flat in Cowbridge in October 2008. The dilemma was if we could estimate the compensation to the landlord would be for a 90 year lease extension. Identical residencies in Cowbridge with 100 year plus lease were valued around £183,600. The mid-range amount of ground rent was £65 invoiced annually. The lease terminated in 2083. Considering the 57 years outstanding we estimated the premium to the freeholder to extend the lease to be between £28,500 and £33,000 plus costs.