Looe residential property held on a long lease is a depreciating asset as the leaseholder only owns the property for a set term.
It is conventional wisdom that a property with over 100 years remaining is worth roughly the same as a freehold. Where an further ninety years added to any lease with more than 45 years remaining, the premises will be equivalent in value to a freehold for many years in the future.
| 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 30 years plus the term of the mortgage at the outset of the mortgage. |
| Santander | If the property is leasehold, the remaining unexpired lease term at the end of the new mortgage term must be at least 50 years where any part of the mortgage is on Interest Only and 30 years if all loan parts are on Capital Repayment and Interest. You must report the unexpired lease term to us and await our instructions if:
|
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
The conveyancing solicitors that we work with undertake Looe lease extensions and help protect your position. A lease extension can be arranged to be completed to coincide with a change of ownership so the costs of the lease extension are paid for using part of the sale proceeds. You really do need expert legal advice in this difficult and technical area of law. The lawyer we work with provide it.
During the course of the last few months Jasper, came dangerously close to the 80-year mark with the lease on his studio flat in Looe. In buying his property 18 years ago, the unexpired term was of no concern. by good luck, he recognised he needed to take action soon on a lease extension. Jasper extended the lease at the eleventh hour last August. Jasper and the landlord who owned the flat above eventually agreed on sum of £5,000 . If he not met the deadline, the figure would have escalated by at least £1,000.
Mr G Girard bought a studio apartment in Looe in January 1996. We are asked if we could shed any light on how much (roughly) price would likely be for a ninety year extension to my lease. Comparable properties in Looe with a long lease were valued about £223,400. The mid-range amount of ground rent was £60 invoiced every twelve months. The lease finished in 2085. Taking into account 59 years remaining we estimated the compensation to the freeholder for the lease extension to be between £27,600 and £31,800 not including costs.
Last October we were phoned by Dr Jacob Lee , who acquired a garden apartment in Looe in May 2003. The dilemma was if we could approximate the premium would be for a ninety year lease extension. Identical premises in Looe with 100 year plus lease were worth £205,000. The mid-range ground rent payable was £50 billed monthly. The lease came to a finish on 1 April 2105. Given that there were 79 years unexpired we calculated the compensation to the freeholder for the lease extension to be within £8,600 and £9,800 not including legals.