The market value of Seaton leasehold residential property falls as the lease term becomes shorter and this will have an impact on its saleability. The expense of a lease extension can escalate substantially once the unexpired lease term is less than 80 years
Leasehold premises in Seaton with over 100 years left on the lease are sometimes 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 purchasing the freehold unless savings on ground rent and estate charges justify it.
| Lender | Requirement |
|---|---|
| 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. |
| Coventry Building Society | A minimum of 70 years unexpired lease at completion for all scheme types apart from Lifetime Mortgages (Equity Release), which require a minimum unexpired term of 80 years at completion. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| 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 |
| 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. |
Regardless of whether you are a tenant or a freeholder in Seaton,the lease extension solicitors that we work with will always be prepared to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Seaton valuers.
Two years ago Lucas, came critically close to the 80-year threshold with the lease on his basement flat in Seaton. In buying his flat 18 years previously, the length of the lease was of no relevance. Thankfully, he recognised he needed to take action soon on Extending the lease. Lucas extended the lease at the eleventh hour in May. Lucas and the landlord who owned the flat above eventually settled on an amount of £6,000 . If the lease had slid below eighty years, the figure would have escalated by a minimum £900.
In 2011 we were called by Mr and Mrs. S Díaz who, having owned a one bedroom apartment in Seaton in September 2007. We are asked if we could shed any light on how much (roughly) compensation to the landlord would likely be to prolong the lease by a further 90 years. Comparative properties in Seaton with a long lease were worth £243,000. The mid-range ground rent payable was £65 billed per annum. The lease expired in 2089. Having 63 years as a residual term we calculated the compensation to the freeholder for the lease extension to be between £20,000 and £23,000 exclusive of costs.
Last September we were called by Mr and Mrs. G Bernard , who acquired a recently refurbished apartment in Seaton in May 2012. We are asked if we could estimate the compensation to the landlord would likely be to extend the lease by 90 years. Similar premises in Seaton with an extended lease were in the region of £181,600. The average ground rent payable was £55 billed annually. The lease ended in 2078. Taking into account 52 years outstanding we calculated the premium to the freeholder for the lease extension to be within £30,400 and £35,200 exclusive of expenses.