It’s an underpublicised truth that a Seascale residential lease is a wasting asset. The lease value drops in proportion to its lease length. The extent of this is taken for granted in the early years due to the depreciation being disguised by increases in the Seascale property market.Once your lease gets to 85ish years, you should start considering a lease extension. If the number of years remaining drops under eighty years, you will end up paying 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 additional value that a lease extension will add the property Most leasehold owners in Seascale will be able to extend under the legislation; however a conveyancing solicitor should be able to confirm if you are eligibility. In some situations you may not qualify. There are also strict deadlines and procedures to follow once the process has commenced and you will need to be guided by your conveyancer for the duration of the process.
It is conventional wisdom that a residential leasehold with more than 100 years unexpired lease term is worth roughly the equivalent as a freehold. Where an further 90 years added to all but the shortest lease, 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 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; |
| National Westminster Bank | Mortgage term plus 30 years. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
Retaining our service gives you enhanced control over the value of your Seascale leasehold, as your property will be more valuable and marketable in relation to the lease length should you want to sell. The conveyancing solicitors that we work with have a in-depth market knowledge handling many hundreds of lease extensions or freehold purchase transactions.
Luke owned a conversion apartment in Seascale on the market with a lease of just over 72 years outstanding. Luke on an informal basis contacted his landlord being a well known local-based freehold company and enquired on a premium to extend the lease. The landlord was keen to grant an extension on non-statutory terms taking the lease to 125 years on the basis of a new rent initially set at £200 per annum and doubled every twenty five years thereafter. Ordinarily, ground rent would not be due on a lease extension were Luke to exercise his statutory right. Luke procured expert legal guidance and was able to make an informed decision and handle with the matter and ending up with a market value flat.
Last month we were called by Mr Gabriel Bertrand , who acquired a basement flat in Seascale in February 1997. We are asked if we could estimate the price would be for a ninety year lease extension. Similar residencies in Seascale with an extended lease were valued about £254,200. The mid-range amount of ground rent was £60 billed quarterly. The lease concluded in 2075. Given that there were 51 years remaining we estimated the premium to the landlord for the lease extension to be within £43,700 and £50,600 not including expenses.
In 2009 we were called by Mr J Ward who, having moved into a basement flat in Seascale in February 2004. The dilemma was if we could approximate the price could be for a ninety year lease extension. Identical residencies in Seascale with 100 year plus lease were valued around £210,600. The mid-range ground rent payable was £45 collected quarterly. The lease elapsed in 2086. Considering the 62 years unexpired we approximated the compensation to the landlord for the lease extension to be between £18,100 and £20,800 exclusive of expenses.