Unfortunately that a Creigiau residential lease is a deteriorating asset. As the lease term reduces so does the value of the property. The extent of this is taken for granted in the first few years due to the depreciation being disguised by increases in the Creigiau property prices.Where your lease has approximately ninety years left, you need to start thinking about a lease extension. If lease term drops below 80 years, you will then be required to pay half of the property's 'marriage value' on top of the usual cost of the lease extension to the landlord. The marriage fee is the amount of additional value that a lease extension will add the property The majority of leasehold owners in Creigiau will be able to extend under the legislation; however a conveyancing solicitor will be able to confirm whether you are eligibility. In some cases you may not qualify. There are also strict timetables and procedures to follow once the process is initiated and you will need to be guided by your lawyer for the duration of the process.
Leasehold properties in Creigiau with over 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 circumstances there is often little to be gained by buying the reversionary interest unless savings on ground rent and service charges justify it.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| 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; |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
| 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. |
Regardless of whether you are a tenant or a freeholder in Creigiau,the lease extension experts that we work with will always be willing to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Creigiau valuers.
Freddie was the the leasehold owner of a high value flat in Creigiau being sold with a lease of just over fifty eight years outstanding. Freddie informally spoke with his freeholder being a well known Manchester-based freehold company and enquired on a premium to extend the lease. The landlord was keen to give an extension on non-statutory terms taking the lease to 125 years subject to a new rent initially set at £200 per annum and doubled every 25 years thereafter. No ground rent would be payable on a lease extension were Freddie to exercise his statutory right. Freddie obtained expert advice and secured an acceptable deal informally and ending up with a market value flat.
Mr and Mrs. F Bell acquired a first floor flat in Creigiau in March 1998. The dilemma was if we could shed any light on how much (approximately) compensation to the landlord could be for a 90 year lease extension. Identical premises in Creigiau with an extended lease were in the region of £285,000. The mid-range ground rent payable was £55 invoiced yearly. The lease concluded on 1 January 2106. Given that there were 80 years as a residual term we calculated the compensation to the landlord for the lease extension to be between £12,400 and £14,200 plus costs.
Last Autumn we were called by Mr and Mrs. I Sánchez , who bought a first floor apartment in Creigiau in February 2008. We are asked if we could approximate the premium would be to prolong the lease by ninety years. Identical premises in Creigiau with a long lease were valued about £198,400. The average amount of ground rent was £65 invoiced every twelve months. The lease ran out in 2085. Considering the 59 years left we calculated the premium to the freeholder for the lease extension to be between £21,900 and £25,200 exclusive of expenses.