It’s an underpublicised certainty that a Seascale 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 Seascale property market.Once your lease nears 85ish years, you should start thinking about a lease extension. An important point to note is that it is desirable for lease extension to take place before the term of the existing lease slips under 80 years - otherwise a higher amount will be payable. Most leasehold owners in Seascale will be able to extend under the legislation; however a lawyer should be able to confirm if 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 instigated and you will need to be guided by your lawyer for the duration of the process.
Leasehold residencies in Seascale with in excess of 100 years left on the lease are often referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your premises. In such situations there is often little upside in buying the reversionary interest unless savings on ground rent and estate charges merit 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; |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| 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. |
| Skipton Building Society | 85 years from the date of completion of the mortgage For Buy to Let cases: - lettings must not breach any of the lessee’s covenants; and - consent of the lessor to lettings must be obtained if necessary |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Using our service gives you increased control over the value of your Seascale leasehold, as your property will be more valuable and marketable in respect of lease length should you wish to sell. The lawyers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Isaac was the the leasehold owner of a conversion apartment in Seascale on the market with a lease of a few days over 61 years remaining. Isaac informally contacted his landlord a well known Manchester-based freehold company for a lease extension. The landlord was prepared to give an extension on non-statutory terms taking the lease to 125 years on the basis of a new rent at the outset set at £200 per annum and doubled every twenty five years thereafter. Ordinarily, ground rent would not be payable on a lease extension were Isaac to exercise his statutory right. Isaac procured expert advice and was able to make an informed judgement and handle with the matter and ending up with a market value flat.
Last Autumn we were approach by Dr V Garcia , who moved into a one bedroom flat in Seascale in September 2002. The dilemma was if we could estimate the premium would be for a ninety year extension to my lease. Identical flats in Seascale with an extended lease were valued around £275,000. The average amount of ground rent was £55 invoiced every twelve months. The lease ended on 19 February 2102. Taking into account 77 years outstanding we estimated the premium to the landlord for the lease extension to be within £13,300 and £15,400 not including legals.
Dr David King bought a recently refurbished apartment in Seascale in January 2008. We are asked if we could shed any light on how much (roughly) compensation to the landlord could be for a ninety year extension to my lease. Similar flats in Seascale with a long lease were valued around £183,600. The mid-range amount of ground rent was £65 billed monthly. The lease ran out in 2082. Having 57 years unexpired we calculated the compensation to the freeholder for the lease extension to be within £28,500 and £33,000 not including professional charges.