On the balance of probabilities if you own a flat in Seaham you actually own a long leasehold interest over your property
It is generally accepted that a residential leasehold with in excess of 100 years unexpired lease term is worth approximately the same as a freehold. Where an additional 90 years added to any lease with more than 45 years remaining, the residence will be worth the same as a freehold for many years in the future.
| 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. |
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| 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; |
| 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. |
| Santander | If the property is leasehold, the remaining unexpired lease term at the end of the new mortgage term must be at least 50 years where any part of the mortgage is on Interest Only and 30 years if all loan parts are on Capital Repayment and Interest. You must report the unexpired lease term to us and await our instructions if:
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Using our service will provide you enhanced control over the value of your Seaham leasehold, as your property will be more valuable and marketable in relation to the lease length should you decide to sell. The lawyers that we work with have a wealth of experience of handling many hundreds of lease extensions or freehold purchase transactions.
After protracted correspondence with the freeholder of her ground floor flat in Seaham, Sophie commenced the lease extension process just as her lease was nearing the critical eighty-year mark. The lease extension completed in November 2005. The freeholder’s charges were kept to an absolute minimum.
Last month we were e-mailed by Mr I Morel , who was assigned a lease of a first floor apartment in Seaham in June 2006. We are asked if we could approximate the premium could be for a 90 year extension to my lease. Identical homes in Seaham with 100 year plus lease were in the region of £242,600. The mid-range ground rent payable was £45 invoiced annually. The lease expired on 12 June 2093. Given that there were 67 years unexpired we calculated the premium to the freeholder for the lease extension to be within £11,400 and £13,200 plus professional charges.
In 2011 we were contacted by Dr U Gunderson who, having owned a basement flat in Seaham in September 2008. The question was if we could approximate the premium would be to extend the lease by ninety years. Comparative flats in Seaham with 100 year plus lease were valued around £280,000. The mid-range ground rent payable was £55 collected annually. The lease ran out in 2104. Given that there were 78 years outstanding we approximated the compensation to the freeholder for the lease extension to be between £13,300 and £15,400 plus legals.