Louth leases on residential properties are gradually losing value. The shorter the remaining lease term becomes, the less it is worth – and accordingly any extension of the lease gets more expensive. Most owners of residential leasehold property in Louth enjoy rights under legislation to extend the terms of their leases. If you are a leasehold owner in Louth you should check if your lease has between seventy and 90 years remaining. In particular once the remaining lease term slips under eighty years, the amount payable for any lease extension increases dramatically as an element of the premium you pay is what is known as a marriage value
It is generally considered that a property with over 100 years unexpired lease term is worth roughly the same as a freehold. Where an further 90 years added to any lease with more than 35 years remaining, the residence will be worth the same as 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. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| 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 |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
The conveyancing solicitors that we work with procure Louth 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.
During the course of the last few months Edward, started to get close to the 80-year mark with the lease on his one bedroom flat in Louth. In buying his property two decades ago, the lease term was of minimal importance. by good luck, it dawned on him that he needed to take steps soon on a lease extension. Edward extended the lease just ahead of time in June. Edward and the freeholder eventually settled on sum of £5,500 . If he had missed the deadline, the sum would have escalated by a minimum £925.
Dr O Mason purchased a studio flat in Louth in October 1995. The dilemma was if we could shed any light on how much (roughly) price could be for a 90 year lease extension. Similar properties in Louth with an extended lease were in the region of £285,000. The mid-range amount of ground rent was £55 billed quarterly. The lease finished in 2105. Having 80 years outstanding we approximated the compensation to the freeholder to extend the lease to be between £12,400 and £14,200 exclusive of professional charges.
In 2009 we were contacted by Dr J Howard who, having completed a one bedroom apartment in Louth in February 2006. We are asked if we could estimate the price would likely be for a ninety year lease extension. Similar properties in Louth with a long lease were valued about £200,800. The average amount of ground rent was £65 invoiced every twelve months. The lease finished on 26 March 2085. Having 60 years remaining we calculated the compensation to the freeholder for the lease extension to be within £20,900 and £24,200 exclusive of expenses.