The value of Radyr leasehold residential property falls as the lease term becomes shorter and this will have an impact on its saleability. The cost of a lease extension can increase substantially once the remaining term is less than 80 years
Leasehold residencies in Radyr with in excess of 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 home. In such situations there is often little to be gained by buying the freehold unless savings on ground rent and service charges merit it.
| 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. |
| 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; |
| 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. |
| Skipton Building Society | 85 years from the date of completion of the mortgage For Buy to Let cases: - lettings must not breach any of the lessee’s covenants; and - consent of the lessor to lettings must be obtained if necessary |
The conveyancing solicitors that we work with procure Radyr 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.
Two years ago George, came dangerously close to the 80-year mark with the lease on his purpose- built flat in Radyr. In buying his home twenty years ago, the lease term was of minimal significance. Thankfully, he recognised he needed to take steps soon on a lease extension. George arranged for a lease extension just under the wire last March. George and the landlord ultimately agreed on sum of £5,500 . If he had missed the deadline, the figure would have gone up by at least £1,100.
Last Winter we were called by Mr and Mrs. J García , who owned a garden apartment in Radyr in March 2000. The dilemma was if we could estimate the compensation to the landlord would likely be to extend the lease by 90 years. Similar premises in Radyr with a long lease were valued around £183,600. The average amount of ground rent was £65 collected every twelve months. The lease terminated on 10 March 2082. Having 57 years remaining we approximated the premium to the landlord for the lease extension to be within £28,500 and £33,000 not including legals.
Dr L Gunderson moved into a studio flat in Radyr in November 2006. We are asked if we could approximate the compensation to the landlord would likely be for a ninety year lease extension. Similar flats in Radyr with a long lease were worth £245,000. The average ground rent payable was £45 collected per annum. The lease expiry date was in 2093. Given that there were 68 years outstanding we estimated the premium to the landlord for the lease extension to be between £9,500 and £11,000 plus professional charges.