Cardiff Bay leases on residential properties are gradually losing value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of the lease gets more expensive. Legislation has been in place for sometime now which permits qualifying Cardiff Bay residential leaseholders to extend the terms of long leases. Where you are a leasehold owner in Cardiff Bay you must check if your lease has between 70 and 90 years remaining. There are compelling reasons why a Cardiff Bay leaseholder with a lease having around eighty years remaining should take action to ensure that a lease extension is actioned without delay
It is conventional wisdom that a property with more than 100 years remaining is worth roughly the same as a freehold. Where an additional 90 years added to any lease with more than 45 years remaining, the residence will be equivalent in value to a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage should be declined (see exception below). Leases with greater than 70 years but fewer than 85 years remaining must be referred to issuing office. 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; |
| 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. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
Regardless of whether you are a tenant or a landlord in Cardiff Bay,the lease extension lawyers 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 Cardiff Bay valuers.
Charlie was the the leasehold proprietor of a studio apartment in Cardiff Bay on the market with a lease of a little over fifty eight years outstanding. Charlie on an informal basis spoke with his freeholder a well known Bristol-based freehold company for a lease extension. The freeholder indicated a willingness to grant an extension taking the lease to 125 years on the basis of an increased rent to £200 yearly. Ordinarily, ground rent would not be payable on a lease extension were Charlie to exercise his statutory right. Charlie obtained expert advice and secured an acceptable resolution informally and sell the property.
Last Summer we were e-mailed by Mr Jake Carter , who took over the lease of a first floor flat in Cardiff Bay in May 2010. We are asked if we could shed any light on how much (approximately) compensation to the landlord would be for a ninety year lease extension. Similar flats in Cardiff Bay with an extended lease were valued around £260,000. The mid-range ground rent payable was £50 collected every twelve months. The lease lapsed in 2096. Taking into account 71 years left we estimated the compensation to the landlord to extend the lease to be between £9,500 and £11,000 exclusive of professional charges.
Dr K King bought a one bedroom flat in Cardiff Bay in April 1999. The dilemma was if we could approximate the price would be to prolong the lease by ninety years. Comparable properties in Cardiff Bay with an extended lease were in the region of £254,200. The mid-range amount of ground rent was £60 invoiced annually. The lease lapsed in 2076. Taking into account 51 years as a residual term we calculated the compensation to the freeholder for the lease extension to be within £43,700 and £50,600 not including expenses.