The re-sale value of a leasehold property in Loughton depends on how long the lease has left to run. If it is near to or less than eighty years you should expect problems on re-sale, so it is recommended to arrange for a lease extension ahead of purchasing. It is preferable to start the process of extending the lease is when the lease still has 82 years unexpired so that a lease extension can be concluded ahead of the 80 year mark. Current legislation entitles Loughton qualifying lessees to acquire a new lease which will be for the current unexpired lease term plus a further term of ninety years. The reason of the valuation is to determine the sum payable by the lessee to the freeholder for the acquisition of the lease extension.
Leasehold residencies in Loughton with more than 100 years remaining on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your property. In such situations there is often little upside in buying the freehold unless savings on ground rent and maintenance charges merit it.
| Lender | Requirement |
|---|---|
| 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. |
| 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. |
| 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. |
Lease extensions in Loughton can be a difficult process. We recommend you procure guidance from a conveyancer and surveyor well versed in the legislation and lease extension process.
We provide you with an expert from a selection of lease extension solicitors, which ensures a targeted and efficient service as you have a dedicated port of call with an individual lawyer. Our lease extension solicitors have a wealth of experience dealing with Loughton lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
During the course of the last few months Jasper, came critically close to the eighty-year mark with the lease on his purpose- built apartment in Loughton. In buying his flat two decades ago, the lease term was of little interest. by good luck, he recognised he needed to take action soon on Extending the lease. Jasper arranged for a lease extension at the eleventh hour in September. Jasper and the landlord who owned the flat above ultimately agreed on an amount of £6,000 . If he not met the deadline, the premium would have become more costly by a minimum £850.
In 2014 we were called by Mr Y Taylor who, having bought a ground floor flat in Loughton in April 1999. We are asked if we could estimate the premium would likely be for a 90 year lease extension. Identical residencies in Loughton with an extended lease were in the region of £246,800. The average amount of ground rent was £60 collected every twelve months. The lease came to a finish in 2076. Having 50 years as a residual term we calculated the premium to the landlord to extend the lease to be between £44,700 and £51,600 plus legals.
An example of a Freehold Enfranchisement decision for a Loughton property 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 was in relation to 2 flats. The unexpired residue of the current lease was 69.26 years.