Cullercoats leases on residential properties are gradually decreasing in value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of your lease becomes more expensive. It is the case that most Cullercoats tenants have the right to extend their lease by an additional ninety years by virtue of the 1993 Leasehold Reform Act. Where you are a leasehold owner in Cullercoats you should see if your lease has between seventy and 90 years remaining. In particular once the remaining lease term slips under eighty years, the compensation to the landlord for any lease extension increases dramatically as part of the premium you pay is what is known as a marriage value
Leasehold residencies in Cullercoats with more than 100 years outstanding on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your premises. In such circumstances there is often little to be gained by purchasing the freehold unless savings on ground rent and estate charges justify 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. |
| Coventry Building Society | 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| 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. |
Engaging our service gives you increased control over the value of your Cullercoats leasehold, as your property will be more valuable and marketable in relation to the lease length should you wish to sell. The lawyers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Eli was the the leasehold proprietor of a high value apartment in Cullercoats being marketed with a lease of a little over fifty eight years outstanding. Eli informally contacted his landlord a well known London-based freehold company for a lease extension. The freeholder indicated a willingness to extend the lease to 125 years on the basis of a new rent to start with set at £200 per annum and increase every twenty five years thereafter. Ordinarily, ground rent would not be payable on a lease extension were Eli to invoke his statutory right. Eli obtained expert advice and was able to make a more informed decision and deal with the matter and ending up with a market value flat.
In 2010 we were called by Mr Callum Norbert who, having owned a recently refurbished apartment in Cullercoats in July 1999. The question was if we could shed any light on how much (roughly) price would likely be for a 90 year extension to my lease. Comparative flats in Cullercoats with an extended lease were valued around £285,000. The average amount of ground rent was £45 billed yearly. The lease expired on 8 July 2098. Considering the 72 years as a residual term we approximated the compensation to the landlord to extend the lease to be within £12,400 and £14,200 exclusive of costs.
Last Winter we were e-mailed by Dr Harvey André , who was assigned a lease of a one bedroom flat in Cullercoats in September 2007. We are asked if we could shed any light on how much (roughly) price would likely be to extend the lease by 90 years. Comparable residencies in Cullercoats with an extended lease were valued about £233,200. The average amount of ground rent was £60 invoiced yearly. The lease expired in 2087. Considering the 61 years left we approximated the compensation to the landlord to extend the lease to be within £22,800 and £26,400 not including legals.