Loughborough leases on residential properties are gradually losing value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of your lease becomes more expensive. Legislation has been in place for sometime now allowing qualifying Loughborough residential leaseholders to extend the terms of long leases. If you are a leasehold owner in Loughborough you should check if your lease has between 70 and 90 years left. There are good reasons why a Loughborough flat owner with a lease having around 80 years remaining should take steps to ensure that a lease extension is actioned without delay
Leasehold residencies in Loughborough with more than one hundred years unexpired on the lease are often referred to as ‘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 purchasing the reversionary interest unless savings on ground rent and maintenance charges justify it.
| Lender | Requirement |
|---|---|
| Accord Mortgages | 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| 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. |
| 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. |
Regardless of whether you are a tenant or a freeholder in Loughborough,the lease extension experts 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 Loughborough valuers.
Last year Nathaniel, came seriously near to the eighty-year threshold with the lease on his one bedroom flat in Loughborough. In buying his property 19 years ago, the unexpired term was of no relevance. by good luck, it dawned on him that he would soon be paying way over the odds for Extending the lease. Nathaniel extended the lease just under the wire last July. Nathaniel and the freeholder subsequently settled on the final figure of £5,000 . If the lease had slipped below eighty years, the price would have become more costly by a minimum £1,125.
Mr N Wright took over the lease of a ground floor flat in Loughborough in June 2005. The dilemma was if we could estimate the price could be for a 90 year lease extension. Comparable flats in Loughborough with an extended lease were valued around £295,000. The mid-range ground rent payable was £45 collected every twelve months. The lease lapsed in 2100. Taking into account 74 years outstanding we calculated the premium to the freeholder to extend the lease to be between £8,600 and £9,800 plus costs.
In 2014 we were e-mailed by Mr W Collins who, having was assigned a lease of a recently refurbished flat in Loughborough in October 1995. The dilemma was if we could estimate the premium would be for a 90 year extension to my lease. Comparative properties in Loughborough with an extended lease were worth £243,000. The mid-range amount of ground rent was £65 collected monthly. The lease expired on 13 January 2089. Considering the 63 years as a residual term we estimated the premium to the freeholder for the lease extension to be within £20,000 and £23,000 not including costs.