The market value of a leasehold property in Scarborough depends on how many years the lease has remaining. If it is near to or fewer than eighty years you should envisage problems on re-sale, so it is recommended to arrange for a lease extension prior to buying. Ideally one should start the lease extension process when the lease still has 82 years unexpired so that a lease extension can be addressed well before the 80 year threshold. Current legislation enables Scarborough qualifying lessees to obtain a lease extension of 90 years in addition to the remaining length of the lease at a peppercorn rent (that is, rent free). The reason of the valuation is to determine the premium payable by the lessee to the freeholder for the purchase of the lease extension.
Leasehold properties in Scarborough with more than 100 years remaining on the lease are often referred to as ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your premises. In such situations there is often little to be gained by buying the reversionary interest unless savings on ground rent and service charges merit it.
| Lender | Requirement |
|---|---|
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| 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. |
| 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. |
| 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. |
Engaging our service will provide you better control over the value of your Scarborough leasehold, as your property will be more valuable and saleable in respect of lease length should you decide to sell. The lawyers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Trailing protracted negotiations with the landlord of her garden flat in Scarborough, Isabelle initiated the lease extension process just as the lease was nearing the crucial 80-year mark. The lease extension was concluded in January 2005. The landlord’s charges were kept to an absolute minimum.
In 2011 we were phoned by Mr and Mrs. J Lewis who, having purchased a garden apartment in Scarborough in April 2004. We are asked if we could approximate the price would likely be to prolong the lease by 90 years. Identical residencies in Scarborough with an extended lease were worth £300,000. The mid-range amount of ground rent was £50 billed every twelve months. The lease terminated on 16 October 2101. Taking into account 76 years remaining we approximated the premium to the landlord to extend the lease to be between £8,600 and £9,800 exclusive of professional charges.
Dr Y Nguyen purchased a recently refurbished apartment in Scarborough in February 2005. The question was if we could shed any light on how much (roughly) price would likely be for a ninety year lease extension. Comparative residencies in Scarborough with 100 year plus lease were worth £257,800. The mid-range amount of ground rent was £65 billed monthly. The lease expired on 6 May 2090. Given that there were 65 years left we calculated the premium to the freeholder for the lease extension to be within £18,100 and £20,800 exclusive of costs.