It’s a harsh certainty that a Loughton residential lease is a deteriorating asset. The lease value reduces in proportion to its lease length. The extent of this is not fully appreciated in the first few years due to the deflation being disguised by increases in the Loughton property market.Once your lease nears 85ish years, you need to start thinking about a lease extension. If the number of years remaining slips under eighty years, you will then be required to pay 50% of the property's 'marriage value' in addition to the usual cost of the lease extension to the landlord. The marriage fee is the amount of additional value that a lease extension will add the property The majority of leasehold owners in Loughton will be able to extend under the legislation; however a conveyancing solicitor will be able to clarify whether you are eligibility. In some cases you may not be entitled. There are also strict deadlines and procedures to follow once the process has commenced and you will need to be guided by your lawyer for the duration of the process.
Leasehold residencies in Loughton with over 100 years left 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 premises. In such circumstances there is often little upside in buying the reversionary interest unless savings on ground rent and service charges merit 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 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; |
| 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. |
| Halifax | Minimum 70 years from the date 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 |
The conveyancers that we work with handle 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 conveyancer we work with provide it.
Half a year ago Austin, came critically near to the eighty-year mark with the lease on his one bedroom apartment in Loughton. In buying his home two decades ago, the length of the lease was of little interest. Luckily, it dawned on him that he needed to take steps soon on Extending the lease. Austin arranged for a lease extension just under the wire last May. Austin and the freeholder via the managing agents in the end settled on sum of £5,000 . If he failed to meet the deadline, the sum would have gone up by at least £875.
Mr Reuben Brooks completed a first floor apartment in Loughton in February 2004. The dilemma was if we could approximate the price would likely be to extend the lease by a further 90 years. Similar premises in Loughton with a long lease were worth £208,200. The average ground rent payable was £65 billed per annum. The lease lapsed in 2087. Given that there were 61 years unexpired we calculated the premium to the freeholder for the lease extension to be within £19,000 and £22,000 not including fees.
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 related to 2 flats. The number of years remaining on the existing lease(s) was 69.26 years.