Looe leases on residential properties are gradually losing value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of your lease gets more expensive. It is the case that most Looe tenants have the right to extend their lease by an additional ninety years by virtue of the 1993 Leasehold Reform Act. Where you are a leasehold owner in Looe you should check if your lease has between 70 and ninety years remaining. There are good reasons why a Looe flat owner with a lease having around 80 years remaining should take steps to ensure that a lease extension is put in place without delay
It is conventional wisdom that a property with in excess of 100 years unexpired lease term is worth roughly the same as a freehold. Where an additional 90 years added to all but the shortest lease, the premises will be equivalent in value to a freehold for decades to come.
| 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. |
| 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| 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 Looe leasehold, as your property will be more valuable and marketable in terms of lease length should you want to sell. The lawyers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
In the wake of 9 months of protracted discussions with the freeholder of her two bedroom apartment in Looe, Rhiannon initiated the lease extension process as the eighty year deadline was quickly approaching. The transaction completed in January 2014. The freeholder’s fees were restricted to a tad over 550 GBP.
In 2014 we were contacted by Dr Kian Mason who, having was assigned a lease of a ground floor apartment in Looe in April 2009. We are asked if we could shed any light on how much (roughly) price would be to extend the lease by ninety years. Comparable homes in Looe with an extended lease were worth £198,800. The mid-range amount of ground rent was £55 collected every twelve months. The lease ran out in 2081. Having 55 years outstanding we approximated the compensation to the freeholder for the lease extension to be within £33,300 and £38,400 exclusive of expenses.
In 2010 we were called by Mr Jason Torres who, having took over the lease of a basement apartment in Looe in November 1998. The question was if we could approximate the premium would likely be to extend the lease by ninety years. Comparable residencies in Looe with an extended lease were worth £300,000. The average amount of ground rent was £50 invoiced monthly. The lease expiry date was in 2101. Having 75 years remaining we calculated the compensation to the landlord for the lease extension to be within £9,500 and £11,000 exclusive of fees.