As the the remaining lease term of a Cullercoats residential lease diminished so does its value and therefore the value of your property. Where the lease has, beyond 99 years to run then this decrease may be of little impact however there will become a stage when a lease has fewer than 80 years remaining as part of the premium you will incur is what is termed as a marriage value. This could be significant. It is the main reason why you should extend the lease sooner than later. Most flat owners in Cullercoats will qualify for this right; that being said a lawyer can advise whether you qualify for a lease extension. In limited situations you may not qualify, the most common reason being that you have owned the property for under two years.
Leasehold premises in Cullercoats with over one hundred years outstanding on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your property. In such situations there is often little to be gained by purchasing the reversionary interest unless savings on ground rent and service 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. |
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage are not acceptable. 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; |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
The conveyancers that we work with procure Cullercoats 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 conveyancer we work with provide it.
Twenty four months ago Sebastian, came dangerously close to the 80-year mark with the lease on his leasehold apartment in Cullercoats. In buying his property two decades ago, the length of the lease was of no concern. Luckily, it dawned on him that he would soon be paying an escalated premium for a lease extension. Sebastian was able to extend his lease just in the nick of time last September. Sebastian and the freeholder via the management company subsequently agreed on an amount of £6,000 . If the lease had fallen lower than 80 years, the figure would have increased by at least £875.
Dr I Wilson owned a studio flat in Cullercoats in June 1995. The dilemma was if we could shed any light on how much (roughly) price would likely be to extend the lease by 90 years. Identical flats in Cullercoats with 100 year plus lease were in the region of £257,800. The mid-range amount of ground rent was £65 collected per annum. The lease expired on 5 August 2091. Given that there were 65 years unexpired we calculated the compensation to the landlord to extend the lease to be within £18,100 and £20,800 plus expenses.
Last month we were e-mailed by Ms O Bernard , who took over the lease of a purpose-built flat in Cullercoats in July 2003. We are asked if we could estimate the price would likely be for a 90 year lease extension. Identical properties in Cullercoats with 100 year plus lease were in the region of £191,400. The mid-range amount of ground rent was £55 collected monthly. The lease expired on 5 October 2080. Having 54 years unexpired we calculated the premium to the landlord for the lease extension to be between £34,200 and £39,600 exclusive of professional charges.