The value of Cullercoats leasehold residential property falls as the lease term becomes shorter and this will have an impact on its saleability. The cost of extending the lease can escalate materialy once the unexpired lease term is below than 80 years
It is conventional wisdom that a residential leasehold with in excess of one hundred years unexpired lease term is worth roughly the same as a freehold. Where an further 90 years added to all but the shortest lease, the property will be worth the same as a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. |
| 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. |
| 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. |
Irrespective of whether you are a tenant or a freeholder in Cullercoats,the lease extension experts that we work with will always be willing to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Cullercoats valuers.
Two years ago Alex, came critically near to the eighty-year mark with the lease on his first floor flat in Cullercoats. Having bought his property 18 years ago, the lease term was of minimal importance. As luck would have it, he recognised he would soon be paying an escalated premium for Extending the lease. Alex arranged for a lease extension at the eleventh hour last January. Alex and the landlord who owned the flat above ultimately settled on an amount of £5,500 . If he failed to meet the deadline, the premium would have escalated by at least £1,100.
In 2014 we were contacted by Mr and Mrs. L Thompson who, having owned a ground floor apartment in Cullercoats in June 2000. The dilemma was if we could estimate the price could be for a 90 year extension to my lease. Similar residencies in Cullercoats with a long lease were in the region of £198,800. The mid-range ground rent payable was £55 invoiced quarterly. The lease finished in 2080. Taking into account 55 years unexpired we estimated the compensation to the landlord to extend the lease to be within £33,300 and £38,400 not including professional charges.
In 2011 we were approached by Mr Aaron Scott who, having acquired a basement apartment in Cullercoats in May 1997. The question was if we could shed any light on how much (roughly) compensation to the landlord would be to extend the lease by ninety years. Similar properties in Cullercoats with an extended lease were valued around £295,000. The mid-range ground rent payable was £50 invoiced per annum. The lease ended on 4 October 2100. Taking into account 75 years outstanding we calculated the premium to the freeholder for the lease extension to be between £8,600 and £9,800 plus expenses.