With a long leasehold premises in Louth, you are in fact renting it for a certain period of time. In recent years flat leases are usually granted for 99 years or 125. Even though this may appear like a lengthy period of time, you may think about a lease extension sooner as opposed to later. The general rule is that the shorter the lease is the cost of extending the lease increases markedly notably when there are fewer than 80 years left. Leasehold owners in Louth with a lease drawing near to 81 years remaining should seriously consider extending it as soon as possible. Once the lease term has fewer than 80 years remaining, under the relevant Act the landlord is entitled to calculate and demand a greater amount, based on a technical multiplication, known as “marriage value” which is payable.
It is conventional wisdom that a property with over 100 years unexpired lease term is worth approximately the equivalent as a freehold. Where an additional ninety years added to all but the shortest lease, the residence will be equivalent in value to a freehold for many years in the future.
| 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. |
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| 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. |
| 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 lawyers that we work with handle 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 lawyer we work with provide it.
Last year Muhammad, came precariously near to the 80-year mark with the lease on his garden flat in Louth. Having purchased his property two decades ago, the length of the lease was of little significance. Fortunately, it dawned on him that he would imminently be paying an escalated premium for Extending the lease. Muhammad arranged for a lease extension at the eleventh hour last August. Muhammad and the landlord subsequently settled on sum of £5,500 . If the lease had dropped to less than eighty years, the figure would have escalated by a minimum £1,100.
In 2013 we were called by Mrs I Mason who, having purchased a first floor flat in Louth in November 2000. We are asked if we could estimate the premium would be for a ninety year extension to my lease. Similar properties in Louth with an extended lease were worth £270,000. The average amount of ground rent was £55 collected quarterly. The lease ran out on 24 February 2101. Considering the 75 years as a residual term we approximated the premium to the landlord for the lease extension to be within £9,500 and £11,000 exclusive of expenses.
Dr Riley García moved into a studio apartment in Louth in September 2012. The question was if we could approximate the compensation to the landlord could be to extend the lease by ninety years. Comparative homes in Louth with a long lease were worth £166,400. The average amount of ground rent was £60 billed yearly. The lease terminated on 26 November 2080. Taking into account 54 years left we approximated the premium to the landlord to extend the lease to be between £32,300 and £37,400 plus fees.