Looe leases on residential properties are gradually decreasing in value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of the lease gets more expensive. Legislation has been in place for sometime now allowing qualifying Looe residential leaseholders to extend the terms of long leases. Where you are a leasehold owner in Looe you would be well advised to investigate if your lease has between seventy and 90 years left. There are good reasons why a Looe flat owner with a lease having around eighty years left should take steps to make sure that a lease extension is put in place without delay
Leasehold residencies in Looe with in excess of one hundred years outstanding on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your home. In such situations there is often little to be gained by buying the freehold unless savings on ground rent and service charges warrant it.
| 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. |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| 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. |
| Royal Bank of Scotland | 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. |
Regardless of whether you are a tenant or a freeholder in Looe,the lease extension experts that we work with will always be happy to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Looe valuers.
Jayden owned a studio apartment in Looe being marketed with a lease of fraction over sixty years unexpired. Jayden informally contacted his landlord being a well known Bristol-based freehold company for a lease extension. The freeholder indicated a willingness to extend the lease to 125 years subject to an increased rent to £50 per annum. Ordinarily, ground rent would not be due on a lease extension were Jayden to exercise his statutory right. Jayden obtained expert legal guidance and secured satisfactory resolution informally and sell the property.
Last March we were approach by Mr and Mrs. Y James , who bought a garden apartment in Looe in June 1998. The dilemma was if we could shed any light on how much (roughly) price would likely be to extend the lease by 90 years. Comparable flats in Looe with a long lease were in the region of £230,800. The average amount of ground rent was £60 invoiced every twelve months. The lease concluded on 26 June 2085. Having 60 years outstanding we approximated the premium to the freeholder for the lease extension to be between £24,700 and £28,600 not including professional charges.
In 2012 we were contacted by Dr Luke Díaz who, having moved into a purpose-built flat in Looe in June 2007. We are asked if we could approximate the premium would be for a 90 year lease extension. Comparable flats in Looe with an extended lease were valued around £210,000. The mid-range ground rent payable was £50 billed per annum. The lease expired in 2105. Given that there were 80 years unexpired we estimated the premium to the freeholder to extend the lease to be between £8,600 and £9,800 not including fees.