The re-sale value of a leasehold property in Loughton is impacted by how many years the lease has remaining. If it is close to or fewer than eighty years you should envisage problems on re-sale, so it is advisable to arrange for the lease to be extended ahead of purchasing. Ideally one should start the lease extension process when the lease still has 82 years unexpired so that formalities can be finalised in advance of the 80 year mark. Leasehold Reform legislation enables Loughton qualifying lessees to obtain a new lease which will be for the balance of the existing lease plus an additional term of ninety years. The purpose of the valuation is to arrive at an opinion of the amount payable by the lessee to the freeholder for the purchase of the lease extension.
Leasehold premises in Loughton with more than one hundred years remaining on the lease are often regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your home. In such circumstances there is often little upside in purchasing the reversionary interest unless savings on ground rent and service charges warrant it.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage should be declined (see exception below). Leases with greater than 70 years but fewer than 85 years remaining must be referred to issuing office. Leases with fewer than 70 years should only be referred to the issuing office where the following scenario applies, as discretion may be applied subject to bank approval: • Property is located in any of the following prestigious developments: Cadogan, Crown, Grosvenor, Howard de Walden, Portman or Wellcome Trust Estates in Central London AND • The value of the property subject to the short remaining term is £500,000 or more AND • The loan to value does not exceed 90% for purchases, 90% like for like re-mortgages, 80% for re-mortgages with any element of capital raising and 80% for existing Barclays mortgage borrowers applying for additional borrowing; |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| 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. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Irrespective of whether you are a tenant or a freeholder in Loughton,the lease extension solicitors that we work with will always be happy to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Loughton valuers.
Last year Theo, started to get close to the 80-year mark with the lease on his leasehold flat in Loughton. Having bought his home twenty years previously, the lease term was of little concern. As luck would have it, he realised he would imminently be paying an escalated premium for a lease extension. Theo arranged for a lease extension at the eleventh hour in June. Theo and the freeholder ultimately settled on sum of £6,000 . If the lease had descended lower than eighty years, the premium would have increased by at least £900.
Mr and Mrs. O Davies bought a garden apartment in Loughton in September 2009. The question was if we could shed any light on how much (approximately) price could be to extend the lease by 90 years. Similar residencies in Loughton with an extended lease were in the region of £270,000. The mid-range ground rent payable was £55 invoiced quarterly. The lease concluded on 8 April 2100. Having 75 years left we estimated the compensation to the freeholder for the lease extension to be within £9,500 and £11,000 plus fees.
An example of a Freehold Enfranchisement case for a Loughton residence is 201 & 201a St. Barnabas Road in October 2013. The Tribunal decided that the price to be paid by the Applicants for the freehold interest is £20,071. This case affected 2 flats. The unexpired term as at the valuation date was 69.26 years.