Roath leases on residential properties are gradually diminishing in value. The shorter the remaining lease term becomes, the less it is worth – and accordingly any extension of your lease becomes more expensive. It is the case that most Roath tenants have the right to extend their lease by an additional 90 years in accordance with the 1993 Leasehold Reform Act. If you are a leasehold owner in Roath you would be well advised to investigate if your lease has between seventy and ninety years remaining. There are compelling reasons why a Roath leaseholder with a lease having around 80 years left should take action to ensure that a lease extension is put in place without delay
It is generally considered that a property with over 100 years remaining is worth approximately the same as a freehold. Where an additional 90 years added to all but the shortest lease, the property will be equivalent in value to a freehold for many years ahead.
| 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. |
| 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. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 75 years plus the term of the mortgage at the outset of the mortgage. |
| 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. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Retaining our service will provide you better control over the value of your Roath leasehold, as your property will be more valuable and marketable in relation to the lease length should you want to sell. The conveyancers that we work with have a wealth of experience of handling many hundreds of lease extensions or freehold purchase transactions.
Zachary was the the leasehold proprietor of a studio apartment in Roath being marketed with a lease of a few days over 59 years left. Zachary on an informal basis approached his freeholder a well known Bristol-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 initially set at £100 per annum and increase every twenty five years thereafter. Ordinarily, ground rent would not be payable on a lease extension were Zachary to exercise his statutory right. Zachary obtained expert advice and secured satisfactory resolution without going to tribunal and sell the property.
Dr B Miller bought a purpose-built flat in Roath in January 1995. The question was if we could approximate the compensation to the landlord could be for a 90 year lease extension. Comparable residencies in Roath with 100 year plus lease were worth £208,600. The average amount of ground rent was £60 invoiced yearly. The lease lapsed in 2083. Considering the 57 years left we approximated the compensation to the landlord for the lease extension to be between £30,400 and £35,200 not including expenses.
Last year we were e-mailed by Mr Alex Morel , who moved into a recently refurbished flat in Roath in September 2001. The question was if we could estimate the compensation to the landlord would be to prolong the lease by a further 90 years. Similar residencies in Roath with an extended lease were worth £200,000. The average amount of ground rent was £50 invoiced every twelve months. The lease elapsed in 2103. Having 77 years unexpired we calculated the compensation to the landlord for the lease extension to be between £8,600 and £9,800 exclusive of expenses.