Loughton leases on residential properties are gradually decreasing in value. The shorter the remaining lease term becomes, the less it is worth – and accordingly any extension of the lease becomes more expensive. Most owners of residential leasehold property in Loughton enjoy rights under legislation to extend the terms of their leases. If you are a leasehold owner in Loughton you really ought to check if your lease has between 70 and ninety years left. In particular once the remaining lease term slips under eighty years, the compensation to the landlord for any lease extension increases dramatically as part of the premium you pay is what is known as a marriage value
Leasehold premises in Loughton with more than one hundred years outstanding on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your property. In such situations there is often little to be gained by buying the freehold unless savings on ground rent and service charges justify it.
| Lender | Requirement |
|---|---|
| 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. |
| Leeds Building Society | 85 years remaining from the start 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 |
| 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. |
The conveyancing solicitors that we work with procure Loughton 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 conveyancing solicitor we work with provide it.
Thomas owned a high value flat in Loughton on the market with a lease of fraction over 72 years unexpired. Thomas informally spoke with his landlord a well known Bristol-based freehold company for a lease extension. The landlord was prepared to grant an extension on non-statutory terms taking the lease to 125 years on the basis of a rise in the rent to £200 yearly. Ordinarily, ground rent would not be payable on a lease extension were Thomas to exercise his statutory right. Thomas obtained expert legal guidance and was able to make a more informed judgement and handle with the matter and sell the flat.
Dr Gabriel Roberts bought a basement apartment in Loughton in May 2005. The dilemma was if we could approximate the price would be for a ninety year extension to my lease. Identical flats in Loughton with an extended lease were worth £210,600. The average amount of ground rent was £45 billed annually. The lease ran out on 26 November 2087. Having 62 years remaining we estimated the premium to the landlord to extend the lease to be between £18,100 and £20,800 exclusive of professional charges.
An example of a Freehold Enfranchisement case 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 unexpired term was 69.26 years.