With a domestic leasehold property in Cardiff Bay, you effectively rent it for a certain period of time. These days flat leases are usually granted for 99 years or 125. Many leasehold owners become complacent as this seems like a lengthy period of time, you should consider extending the lease sooner rather than later. The general rule is that the shorter the number of years is the cost of extending the lease gets disproportionately greater particularly when there are less than 80 years left. Anyone in Cardiff Bay with a lease drawing near to 81 years unexpired should seriously consider extending it as soon as possible. Once the lease term has fewer than eighty years outstanding, under the relevant Act the freeholder can calculate and levy a greater amount, assessed on a technical multiplication, known as “marriage value” which is due.
It is generally accepted that a residential leasehold with more than one hundred years unexpired lease term is worth approximately the same as a freehold. Where an further ninety years added to any lease with more than 45 years remaining, the residence will be equivalent in value to a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| Chelsea 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. |
| 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. |
| 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. |
| 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. |
The conveyancing solicitors that we work with undertake Cardiff Bay lease extensions and help protect your position. A lease extension can be arranged to be completed to coincide with a change of ownership so the costs of the lease extension are paid for using part of the sale proceeds. You really do need expert legal advice in this difficult and technical area of law. The conveyancing solicitor we work with provide it.
Milo was the the leasehold owner of a conversion apartment in Cardiff Bay being marketed with a lease of fraction over sixty years outstanding. Milo informally approached his landlord a well known Manchester-based freehold company and enquired on a premium to extend the lease. The landlord was prepared to agree an extension on non-statutory terms taking the lease to 125 years subject to a new rent initially set at £100 per annum and doubled every 25 years thereafter. Ordinarily, ground rent would not be due on a lease extension were Milo to invoke his statutory right. Milo procured expert advice and secured satisfactory resolution informally and readily saleable.
Dr R Mitchell moved into a purpose-built apartment in Cardiff Bay in September 1998. The dilemma was if we could estimate the premium could be for a 90 year extension to my lease. Identical premises in Cardiff Bay with an extended lease were in the region of £255,000. The mid-range ground rent payable was £50 invoiced quarterly. The lease concluded on 11 March 2096. Considering the 70 years remaining we approximated the premium to the landlord to extend the lease to be within £10,500 and £12,000 exclusive of legals.
Last October we were called by Dr Isaac Edwards , who acquired a first floor apartment in Cardiff Bay in August 2011. The question was if we could approximate the premium could be for a 90 year lease extension. Similar properties in Cardiff Bay with 100 year plus lease were worth £246,800. The average amount of ground rent was £60 invoiced annually. The lease elapsed in 2076. Taking into account 50 years as a residual term we calculated the premium to the landlord for the lease extension to be between £44,700 and £51,600 plus fees.