Owning a apartment usually means owning a lease of the property, which has a set term of years. The lease will ordinarily be granted for a set period of time , usually 99 or 125 years, although we have witnessed longer and shorter terms in Seaham. Inevitably, the length of lease left reduces as time goes by. This is often overlooked and only becomes a problem when the flat or house needs to be disposed of or re-mortgaged. The shorter the lease the less it is worth and the more it will cost to obtain a lease extension. Qualifying leaseholders in Seaham have the legal entitlement to extend the lease for a further 90 years under the 1993 Leasehold Reform Act. Do give careful attention before putting off your Seaham lease extension. Holding off that expense now only increases the price you will ultimately have to pay to extend your lease
Leasehold properties in Seaham with in excess of 100 years outstanding on the lease are often 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 upside in buying the freehold 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 should be declined (see exception below). Leases with greater than 70 years but fewer than 85 years remaining must be referred to issuing office. 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; |
| Chelsea 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. |
| 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Regardless of whether you are a tenant or a freeholder in Seaham,the lease extension lawyers 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 Seaham valuers.
Last year Gabriel, started to get near to the eighty-year threshold with the lease on his first floor flat in Seaham. In buying his property 18 years ago, the length of the lease was of no relevance. As luck would have it, he noticed he needed to take action soon on a lease extension. Gabriel extended the lease at the eleventh hour in July. Gabriel and the freeholder ultimately agreed on a premium of £5,500 . If he not met the deadline, the sum would have escalated by at least £900.
In 2010 we were contacted by Dr H David who, having moved into a garden apartment in Seaham in January 2008. The question was if we could approximate the compensation to the landlord would likely be for a ninety year lease extension. Comparable homes in Seaham with an extended lease were valued around £191,000. The mid-range ground rent payable was £65 billed every twelve months. The lease lapsed on 12 August 2083. Having 58 years outstanding we calculated the compensation to the landlord for the lease extension to be between £23,800 and £27,400 plus fees.
Mr L Girard owned a one bedroom flat in Seaham in September 2012. We are asked if we could shed any light on how much (approximately) premium could be for a ninety year extension to my lease. Identical premises in Seaham with a long lease were valued about £250,000. The average amount of ground rent was £50 billed annually. The lease elapsed in 2094. Having 69 years outstanding we estimated the compensation to the freeholder for the lease extension to be between £9,500 and £11,000 plus costs.