Loughton Lease Extension - Free Consultation

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Top reasons for Loughton lease extension


Main reasons to commence your Loughton lease extension today:

Increase your lease and increase your Loughton property value

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. Legislation has been in place for sometime now which permits qualifying Loughton residential leaseholders to extend the terms of long leases. Where you are a leasehold owner in Loughton you should check if your lease has between 70 and 90 years left. There are good reasons why a Loughton leaseholder with a lease having around eighty years unexpired should take steps to make sure that a lease extension is actioned without delay

Loughton property with a lease extension is almost the same value as a freehold

It is generally considered that a property with in excess of one hundred years unexpired lease term is worth roughly the equivalent as a freehold. Where an further ninety years added to all but the shortest lease, the premises will be worth the same as a freehold for many years in the future.

Lending institutions will not lend with a short lease

The trend since the credit crunch has been for lenders to tighten lending requirements generally - this has extended to the property over which the mortgage is to be granted. This has meant the unexpired lease term required by mortgage companies has increased. In the past mortgage companies were content with twenty years plus the term of the loan - routinely fifty year leases but those requirements evolved by the requirement for longer and longer leases - many use a minimum term of 75 years as a prerequisite.

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.
Leeds Building Society 85 years remaining from the start of the mortgage.
Santander You must report the unexpired lease term to us and await our instructions if:
1. the unexpired term assumed by our valuer is between 55 and 82 years, but the actual unexpired term differs by more than one year (whether longer or shorter); or
2. the unexpired term assumed by our valuer is more than 82 years but the actual unexpired term is less than 82 years; or
3. no valuation report is provided
However, we will not accept a lease where on expiry of the mortgage:
(i) less than 50 years remain and all or part of the loan is repaid on an interest-only basis: or
(ii) less than 30 years remain and the loan is repaid on a capital and interest basis

We will accept a lease that has been extended under the provisions of the Leasehold Reform Act 1993 provided statutory compensation would be available to the leaseholder.
Royal Bank of Scotland Mortgage term plus 30 years.

Why use us for your lease extension in Loughton?

Regardless of whether you are a tenant or a landlord 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.

Loughton Lease Extension Case Studies:

Connor, Loughton, Essex,

Connor owned a 2 bedroom flat in Loughton being marketed with a lease of a few days over sixty years outstanding. Connor on an informal basis approached his landlord being a well known Manchester-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 subject to a new rent initially set at £150 per annum and doubled every 25 years thereafter. Ordinarily, ground rent would not be payable on a lease extension were Connor to invoke his statutory right. Connor obtained expert legal guidance and secured satisfactory resolution informally and ending up with a market value flat.

Loughton case:

In 2009 we were e-mailed by Mr and Mrs. C Cooper who, having moved into a ground floor flat in Loughton in April 2007. The dilemma was if we could shed any light on how much (roughly) compensation to the landlord could be to extend the lease by an additional years. Comparative premises in Loughton with an extended lease were worth £285,000. The mid-range amount of ground rent was £55 invoiced monthly. The lease terminated on 10 July 2103. Taking into account 79 years unexpired we calculated the compensation to the freeholder to extend the lease to be between £13,300 and £15,400 not including expenses.

Decision in Redbridge

An example of a Freehold Enfranchisement matter before the tribunal 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 affected 2 flats. The unexpired term as at the valuation date was 69.26 years.