With a domestic leasehold premises in Cardiff Bay, you are actually purchasing a right to reside in a property for a set period of time. Modern flat leases are usually granted for 99 years or 125. Many leasehold owners become complacent as this seems like a long period of time, you may think about a lease extension sooner rather than later. Accepted thinking is that the shorter the number of years is the cost of extending the lease gets disproportionately more expensive particularly when there are fewer than eighty years left. Residents in Cardiff Bay with a lease approaching 81 years remaining should seriously think of extending it sooner as opposed to later. When the lease term has below 80 years remaining, under the current statute the landlord can calculate and charge a greater premium, assessed on a technical multiplication, known as “marriage value” which is due.
Leasehold properties in Cardiff Bay with more than 100 years left on the lease are often regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your premises. In such situations there is often little upside in purchasing the reversionary interest unless savings on ground rent and estate charges justify it.
| Lender | Requirement |
|---|---|
| Bank of Scotland | |
| Godiva Mortgages | |
| Halifax | |
| Santander | |
| TSB |
The lawyers that we work with handle 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.
In 2014 Benjamin, came very close to the eighty-year threshold with the lease on his two bedroom apartment in Cardiff Bay. In buying his home two decades ago, the unexpired term was of no importance. As luck would have it, he became aware that he needed to take steps soon on a lease extension. Benjamin extended the lease just under the wire last March. Benjamin and the freeholder via the managing agents in the end settled on the final figure of £5,500 . If the lease had gone to less than 80 years, the premium would have escalated by a minimum £1,050.
Last month we were e-mailed by Mr S Ali , who was assigned a lease of a purpose-built apartment in Cardiff Bay in November 2003. We are asked if we could estimate the premium would likely be for a 90 year extension to my lease. Comparable homes in Cardiff Bay with 100 year plus lease were in the region of £183,600. The average amount of ground rent was £65 invoiced monthly. The lease elapsed on 8 May 2083. Taking into account 57 years outstanding we approximated the compensation to the freeholder for the lease extension to be within £28,500 and £33,000 exclusive of professional charges.
Last month we were approach by Mr and Mrs. E Alexander , who completed a recently refurbished apartment in Cardiff Bay in November 2006. The dilemma was if we could approximate the premium would likely be for a 90 year lease extension. Comparable premises in Cardiff Bay with 100 year plus lease were valued about £245,000. The mid-range ground rent payable was £50 invoiced yearly. The lease end date was in 2094. Taking into account 68 years as a residual term we estimated the premium to the freeholder to extend the lease to be between £9,500 and £11,000 plus expenses.