Cleethorpes leases on residential properties are gradually decreasing in value. The shorter the remaining lease term becomes, the less it is worth – and accordingly any extension of the lease becomes more expensive. It is the case that most Cleethorpes tenants have the right to extend their lease by an additional ninety years under the 1993 Leasehold Reform Act. If you are a leasehold owner in Cleethorpes you should check if your lease has between 70 and 90 years left. In particular once the remaining lease term slips under eighty years, the amount payable for any lease extension increases dramatically as part of the premium you pay is what is known as a marriage value
It is conventional wisdom that a property with over 100 years unexpired lease term is worth roughly the same as a freehold. Where an further ninety years added to any lease with more than 35 years remaining, the residence will be worth the same as 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. |
| Coventry Building Society | 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
The conveyancing solicitors that we work with procure Cleethorpes 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 conveyancer we work with provide it.
Last October Stanley, started to get close to the 80-year threshold with the lease on his basement apartment in Cleethorpes. Having bought his property twenty years ago, the length of the lease was of little interest. As luck would have it, he realised he would imminently be paying an inflated amount for Extending the lease. Stanley was able to extend his lease just under the wire in July. Stanley and the freeholder via the managing agents subsequently agreed on an amount of £6,000 . If he not met the deadline, the figure would have increased by at least £1,150.
Last month we were contacted by Mr O Smith , who owned a one bedroom apartment in Cleethorpes in August 2010. The dilemma was if we could shed any light on how much (approximately) compensation to the landlord could be for a 90 year lease extension. Similar premises in Cleethorpes with 100 year plus lease were worth £250,000. The mid-range ground rent payable was £50 collected every twelve months. The lease concluded in 2094. Given that there were 69 years remaining we calculated the premium to the landlord for the lease extension to be between £9,500 and £11,000 not including professional charges.
Mr and Mrs. J Ramírez was assigned a lease of a first floor apartment in Cleethorpes in March 2010. The question was if we could approximate the price would likely be to extend the lease by a further 90 years. Comparative homes in Cleethorpes with a long lease were in the region of £290,000. The average ground rent payable was £60 billed yearly. The lease concluded on 1 October 2105. Having 80 years remaining we calculated the compensation to the landlord to extend the lease to be between £13,300 and £15,400 not including expenses.