It’s an underpublicised certainty that a Seaham residential lease is a wasting asset. The lease value reduces in proportion to its lease length. The extent of this is not fully appreciated in the first few years due to the depreciation being disguised by increases in the Seaham property market.Once your lease gets to 85ish years, you need to start thinking about a lease extension. If the number of years remaining dips below 80 years, you will then be required to pay half of the property's 'marriage value' on top of the usual cost of the lease extension to the landlord. The marriage fee is the amount of extra value that a lease extension will add the property The majority of flat owners in Seaham will be able to extend under the legislation; however a conveyancer should be able to confirm whether you qualify for an extension. In some situations you may not be entitled. There are also strict timeframes and procedures to be adhered to once the process is initiated and you will need to be guided by your lawyer from beginning to end of the process.
Leasehold premises in Seaham with over one hundred years unexpired on the lease are sometimes regarded as a ‘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 purchasing the reversionary interest unless savings on ground rent and service charges warrant it.
| Lender | Requirement |
|---|---|
| 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; |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| 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. |
The conveyancers that we work with handle Seaham 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 Kian, came critically near to the eighty-year threshold with the lease on his two bedroom apartment in Seaham. In buying his property two decades ago, the lease term was of no concern. Thankfully, he realised he would imminently be paying way over the odds for Extending the lease. Kian extended the lease just ahead of time in July. Kian and the freeholder ultimately settled on sum of £5,500 . If the lease had slipped lower than 80 years, the amount would have escalated by a minimum £1,025.
In 2011 we were e-mailed by Mr Y White who, having bought a ground floor flat in Seaham in July 2001. The question was if we could approximate the price could be to prolong the lease by a further 90 years. Comparable properties in Seaham with a long lease were worth £200,800. The mid-range amount of ground rent was £65 invoiced annually. The lease concluded in 2086. Taking into account 60 years outstanding we approximated the premium to the landlord to extend the lease to be between £20,900 and £24,200 plus costs.
Last Winter we were phoned by Ms Isobel Gunderson , who acquired a ground floor flat in Seaham in May 2004. We are asked if we could estimate the compensation to the landlord would likely be for a 90 year lease extension. Comparative homes in Seaham with 100 year plus lease were in the region of £255,000. The average amount of ground rent was £50 invoiced annually. The lease lapsed in 2097. Given that there were 71 years outstanding we approximated the compensation to the landlord for the lease extension to be between £9,500 and £11,000 exclusive of fees.