The value of Seascale leasehold residential property falls as the lease term becomes shorter and this will have an impact on its saleability. The cost of extending the lease can increase significantly once the unexpired lease term is below than eighty years
Leasehold properties in Seascale with over one hundred years left on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your premises. In such situations there is often little upside in purchasing the reversionary interest unless savings on ground rent and service charges merit it.
| Lender | Requirement |
|---|---|
| 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. |
| Halifax | Minimum 70 years from the date 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. |
| Yorkshire 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. |
Using our service will provide you increased control over the value of your Seascale leasehold, as your property will be more valuable and saleable in relation to the lease length should you want to sell. The conveyancers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Blake was the the leasehold owner of a high value apartment in Seascale being marketed with a lease of a little over sixty years outstanding. Blake informally spoke with his landlord a well known local-based freehold company for a lease extension. The landlord indicated a willingness to grant an extension taking the lease to 125 years subject to a rise in the rent to £200 per annum. Ordinarily, ground rent would not be payable on a lease extension were Blake to invoke his statutory right. Blake procured expert advice and was able to make a more informed judgement and deal with the matter and sell the property.
In 2013 we were phoned by Dr D Edwards who, having purchased a recently refurbished flat in Seascale in August 2004. The question was if we could estimate the premium would likely be for a ninety year extension to my lease. Similar residencies in Seascale with a long lease were in the region of £270,000. The average amount of ground rent was £55 collected per annum. The lease concluded in 2101. Having 75 years as a residual term we approximated the compensation to the freeholder to extend the lease to be within £9,500 and £11,000 not including professional charges.
Last Summer we were e-mailed by Mr and Mrs. E Richardson , who purchased a basement apartment in Seascale in March 2001. We are asked if we could estimate the price could be for a 90 year lease extension. Similar premises in Seascale with 100 year plus lease were in the region of £173,800. The average amount of ground rent was £65 collected monthly. The lease terminated in 2081. Taking into account 55 years outstanding we approximated the premium to the landlord for the lease extension to be within £31,400 and £36,200 exclusive of professional charges.