Unfortunately that a Looe residential lease is a wasting asset. As the lease term diminishes so does the value of the property. The extent of this is taken for granted in the first few years due to the reduction being disguised by increases in the Looe property market.Where your lease has approximately ninety years left, you need to start considering a lease extension. If the number of years remaining slips under eighty years, you will then be required to pay 50% of the property's 'marriage value' in addition to the usual cost of the lease extension to the landlord. The marriage fee is the amount of extra value that a lease extension will add the property Most leasehold owners in Looe will be able to extend under the legislation; however a conveyancing solicitor should be able to clarify whether you are eligibility. In some situations you may not qualify. There are also strict timeframes and procedures to follow once the process is instigated and you will need to be guided by your conveyancer for the duration of the formalities.
It is generally accepted that a residential leasehold with in excess of 100 years remaining is worth roughly the same as a freehold. Where an additional ninety years added to all but the shortest lease, the premises will be equivalent in value to a freehold for many years ahead.
| 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. |
| Godiva Mortgages | 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. |
| National Westminster Bank | Mortgage term plus 30 years. |
| 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. |
Irrespective of whether you are a tenant or a freeholder in Looe,the lease extension solicitors that we work with will always be willing 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.
Last Christmas John, started to get near to the eighty-year mark with the lease on his leasehold apartment in Looe. Having purchased his property 18 years previously, the lease term was of minimal concern. As luck would have it, he recognised he needed to take steps soon on a lease extension. John extended the lease at the eleventh hour last August. John and the landlord who owned the flat above subsequently settled on an amount of £5,500 . If the lease had dropped below 80 years, the amount would have gone up by at least £950.
In 2011 we were phoned by Dr Ryan Evans who, having was assigned a lease of a one bedroom flat in Looe in April 1997. We are asked if we could estimate the premium would likely be for a ninety year lease extension. Comparable homes in Looe with an extended lease were worth £265,200. The average amount of ground rent was £65 invoiced monthly. The lease end date was on 18 October 2091. Having 66 years as a residual term we calculated the premium to the freeholder to extend the lease to be within £15,200 and £17,600 plus legals.
Last Winter we were contacted by Mr and Mrs. K Girard , who purchased a garden apartment in Looe in August 2004. We are asked if we could shed any light on how much (roughly) compensation to the landlord could be to prolong the lease by a further 90 years. Comparable homes in Looe with 100 year plus lease were worth £198,800. The average ground rent payable was £55 billed annually. The lease expired in 2080. Given that there were 55 years remaining we calculated the premium to the landlord for the lease extension to be between £33,300 and £38,400 exclusive of costs.