The market value of a leasehold property in Loughton is impacted by how long the lease has left to run. If it is near to or fewer than eighty years you should foresee problems on re-sale, so it is recommended to arrange for a lease extension before buying. It is preferable to start the process of extending the lease is when a lease still has 82 years to run so that a lease extension can be addressed ahead of the 80 year threshold. Leasehold Reform legislation enables Loughton qualifying lessees to acquire a lease extension of ninety years in addition to the remaining length of the lease at a peppercorn rent (that is, rent free). The intention of the valuation is to determine the amount payable by the lessee to the freeholder for the acquisition of the lease extension.
Leasehold residencies in Loughton with more than one hundred years left on the lease are often regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your premises. In such situations there is often little to be gained by buying the freehold unless savings on ground rent and estate charges justify it.
| Lender | Requirement |
|---|---|
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Chelsea 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. |
| 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. |
| 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 |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
Engaging our service gives you better control over the value of your Loughton leasehold, as your property will be more valuable and saleable in respect of lease length should you decide to sell. The conveyancing solicitors that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Dexter owned a conversion flat in Loughton on the market with a lease of a little over sixty years left. Dexter informally approached his freeholder being a well known Manchester-based freehold company for a lease extension. The freeholder indicated a willingness to grant an extension taking the lease to 125 years subject to a new rent to start with set at £100 per annum and increase every twenty five years thereafter. Ordinarily, ground rent would not be payable on a lease extension were Dexter to invoke his statutory right. Dexter obtained expert legal guidance and was able to make an informed judgement and deal with the matter and sell the property.
In 2013 we were e-mailed by Mr and Mrs. H Harris who, having was assigned a lease of a basement apartment in Loughton in June 1995. We are asked if we could estimate the price would be for a ninety year lease extension. Identical homes in Loughton with an extended lease were in the region of £227,800. The average ground rent payable was £45 collected per annum. The lease lapsed in 2091. Having 65 years left we approximated the compensation to the landlord for the lease extension to be within £13,300 and £15,400 exclusive of professional charges.
An example of a Freehold Enfranchisement matter before the tribunal for a Loughton flat 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 number of years remaining on the existing lease(s) was 69.26 years.