Loughton 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 becomes more expensive. The majority of owners of residential leasehold property in Loughton enjoy rights under legislation to extend the terms of their leases. Where you are a leasehold owner in Loughton you should investigate if your lease has between 70 and ninety years remaining. There are compelling reasons why a Loughton leaseholder with a lease having around 80 years unexpired should take steps to ensure that a lease extension is effected without delay
Leasehold premises in Loughton with more than one hundred years remaining on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your home. In such situations there is often little upside in purchasing the freehold unless savings on ground rent and service charges warrant it.
| Lender | Requirement |
|---|---|
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage are not acceptable. 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; |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 30 years plus the term of the mortgage at the outset of the mortgage. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
| 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. |
Retaining our service will provide you better control over the value of your Loughton leasehold, as your property will be more valuable and marketable in relation to the lease length should you decide to sell. The lawyers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Subsequent to protracted correspondence with the landlord of her studio apartment in Loughton, Jade initiated the lease extension process just as the lease was approaching the crucial 80-year deadline. The legal work completed in February 2005. The freeholder’s costs were kept to an absolute minimum.
Dr Riley Green was assigned a lease of a studio flat in Loughton in January 1999. The dilemma was if we could approximate the price would be to prolong the lease by ninety years. Identical residencies in Loughton with a long lease were worth £183,600. The average ground rent payable was £65 invoiced annually. The lease expired in 2083. Given that there were 57 years outstanding we calculated the premium to the landlord for the lease extension to be between £28,500 and £33,000 not including professional charges.
An example of a Freehold Enfranchisement matter before the tribunal for a Loughton premises 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 number of years remaining on the existing lease(s) was 69.26 years.