The re-sale value of a leasehold property in Looe is impacted by how long the lease has left to run. If it is near to or fewer than 80 years you should expect problems on re-sale, so it is advisable to arrange for the lease to be extended ahead of buying. Ideally one should start the process of extending the lease is when a lease still has 82 years unexpired so that all matters can be concluded prior to the 80 year threshold. Current legislation entitles Looe qualifying lessees to obtain a new lease which will be for the balance of the existing lease plus a further term of 90 years. The reason of the valuation is to determine the sum payable by the lessee to the freeholder for the purchase of the lease extension.
It is conventional wisdom that a property with in excess of one hundred years remaining is worth roughly the same as a freehold. Where an further 90 years added to any lease with more than 45 years unexpired, the premises will be worth the same as a freehold for decades to come.
| Lender | Requirement |
|---|---|
| Halifax | Minimum 70 years from the date of the mortgage. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| Santander | You must report the unexpired lease term to us and await our instructions if: 1. the unexpired term assumed by our valuer is between 55 and 82 years, but the actual unexpired term differs by more than one year (whether longer or shorter); or 2. the unexpired term assumed by our valuer is more than 82 years but the actual unexpired term is less than 82 years; or 3. no valuation report is provided However, we will not accept a lease where on expiry of the mortgage: (i) less than 50 years remain and all or part of the loan is repaid on an interest-only basis: or (ii) less than 30 years remain and the loan is repaid on a capital and interest basis We will accept a lease that has been extended under the provisions of the Leasehold Reform Act 1993 provided statutory compensation would be available to the leaseholder. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| 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. |
The conveyancers that we work with procure 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.
In the wake of eight months of unsuccessful correspondence with the landlord of her garden flat in Looe, Victoria commenced the lease extension process as the eighty year mark was quickly nearing. The transaction completed in August 2009. The freeholder’s charges were kept to an absolute minimum.
Last Summer we were phoned by Mr and Mrs. A Girard , who owned a garden flat in Looe in May 2008. We are asked if we could approximate the price could be to extend the lease by ninety years. Comparative flats in Looe with an extended lease were valued around £171,800. The mid-range amount of ground rent was £55 billed per annum. The lease expired on 22 January 2076. Given that there were 50 years as a residual term we calculated the compensation to the landlord to extend the lease to be between £33,300 and £38,400 not including costs.
Mr and Mrs. A Martinez completed a purpose-built apartment in Looe in November 2004. We are asked if we could estimate the price would be for a 90 year extension to my lease. Comparative residencies in Looe with 100 year plus lease were in the region of £280,000. The mid-range amount of ground rent was £45 billed quarterly. The lease terminated in 2096. Considering the 70 years left we estimated the premium to the freeholder to extend the lease to be within £12,400 and £14,200 exclusive of professional charges.