Unfortunately that a Seaham residential lease is a deteriorating asset. The lease value reduces in proportion to its lease length. The extent of this is not fully appreciated in the early years due to the loss of value being disguised by increases in the Seaham property prices.Where your lease has approximately ninety years left, you need to start thinking about a lease extension. If lease term dips below eighty years, you will then be required to pay 50% of the property's 'marriage value' on top of the usual cost of the lease extension to the landlord. Marriage value is the amount of additional value that a lease extension will add the property The majority of leasehold owners in Seaham will be able to extend under the legislation; however a conveyancing solicitor will be able to clarify whether you are eligibility. In some cases you may not be entitled. There are also strict timetables and procedures to be adhered to once the process is initiated and you will need to be guided by your conveyancing solicitor throughout the formalities.
Leasehold premises in Seaham with more than one hundred years outstanding 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 property. In such circumstances there is often little upside in purchasing the freehold unless savings on ground rent and estate charges merit it.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must also be not less than 75 years at the outset 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. |
The conveyancing solicitors that we work with undertake 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 lawyer we work with provide it.
Trailing unsuccessful correspondence with the landlord of her purpose-built flat in Seaham, Jodie commenced the lease extension process as the 80 year mark was swiftly approaching. The transaction completed in May 2015. The landlord’s costs were kept to an absolute minimum.
In 2011 we were called by Dr Y Moreau who, having acquired a garden flat in Seaham in January 2010. The question was if we could shed any light on how much (roughly) premium would be to prolong the lease by an additional years. Identical flats in Seaham with a long lease were worth £275,000. The average ground rent payable was £55 collected quarterly. The lease lapsed on 23 May 2102. Considering the 77 years left we calculated the premium to the freeholder for the lease extension to be between £13,300 and £15,400 not including professional charges.
Dr V François acquired a purpose-built apartment in Seaham in November 1996. We are asked if we could estimate the premium would be to prolong the lease by a further 90 years. Similar properties in Seaham with 100 year plus lease were in the region of £183,600. The mid-range amount of ground rent was £65 billed annually. The lease terminated on 20 April 2082. Taking into account 57 years unexpired we approximated the compensation to the landlord for the lease extension to be within £28,500 and £33,000 exclusive of fees.