It’s an underpublicised truth that a St Fagans 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 early years due to the loss of value being disguised by increases in the St Fagans property prices.Once your lease gets to 85ish years, you need to start considering a lease extension. If lease term dips below eighty 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. Marriage value is the amount of extra value that a lease extension will add the property Most flat owners in St Fagans will be able to extend under the legislation; however a lawyer will be able to confirm whether you are eligibility. In some cases you may not be entitled. There are also strict timeframes and procedures to follow once the process is initiated and you will need to be guided by your lawyer from beginning to end of the formalities.
It is generally accepted that a residential leasehold with over 100 years remaining is worth roughly the same as a freehold. Where an further ninety years added to all but the shortest lease, the premises will be worth the same as 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. |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| 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. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
| 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 St Fagans,the lease extension solicitors that we work with will always be happy to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with St Fagans valuers.
Michael was the the leasehold owner of a studio apartment in St Fagans being marketed with a lease of just over 61 years remaining. Michael on an informal basis spoke with his landlord being a well known London-based freehold company and enquired on a premium to extend the lease. The landlord indicated a willingness to extend the lease to 125 years on the basis of an increased rent to £100 yearly. No ground rent would be due on a lease extension were Michael to exercise his statutory right. Michael obtained expert legal guidance and secured satisfactory deal informally and readily saleable.
Mr and Mrs. R Alexander acquired a studio apartment in St Fagans in August 2004. We are asked if we could estimate the compensation to the landlord would be to prolong the lease by an additional years. Comparative homes in St Fagans with an extended lease were worth £260,200. The mid-range amount of ground rent was £65 invoiced every twelve months. The lease concluded on 19 September 2091. Taking into account 66 years unexpired we estimated the compensation to the landlord to extend the lease to be within £15,200 and £17,600 plus costs.
Last June we were called by Mr V Ramírez , who purchased a studio apartment in St Fagans in March 1999. We are asked if we could estimate the premium would likely be for a ninety year extension to my lease. Comparative residencies in St Fagans with an extended lease were in the region of £198,800. The mid-range ground rent payable was £55 invoiced per annum. The lease concluded on 26 November 2080. Given that there were 55 years remaining we calculated the premium to the landlord for the lease extension to be between £33,300 and £38,400 exclusive of fees.