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Top reasons for Leighton Buzzard lease extension


Main reasons to start your Leighton Buzzard lease extension today:

A Leighton Buzzard lease depreciates with the years remaining on the lease.

There is no doubt about it a leasehold flat or house in Leighton Buzzard is a wasting asset as a result of the diminishing lease term. If the lease has, over 99 years to run then this decrease may be negligible however there will become a point in time when a lease has fewer than 80 years remaining as part of the premium you will incur is what is known as a marriage value. This could increase sharply the cost. It is the main logic behind why you should extend the lease without delay. Many flat owners in Leighton Buzzard will meet the qualifying criteria; that being said a lawyer will be able to confirm whether you are eligible for a lease extension. In certain situations you may not qualify, the most frequent reason being that you have not been the owner of the property for two years.

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

Leasehold residencies in Leighton Buzzard with in excess of one hundred years remaining 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 upside in buying the freehold unless savings on ground rent and maintenance charges warrant it.

Lending institutions may not finance a property with a short lease

Banks and building societies will not grant a mortgage on short residential leases. You most probably encounter difficulties if you need to sell your flat in Leighton Buzzard if the unexpired lease term is below the criteria set by most lenders. Different mortgage companies have different criteria but in the main they are looking for an unexpired term of at least seventy years.

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.
Bank of Scotland Minimum 70 years from the date of the mortgage.
Birmingham Midshires Minimum 70 years from the date of the mortgage.
Nationwide Building Society - Our minimum unexpired lease term is 55 years, except where lending is over 85% of the purchase price/valuation on a second hand flat, in which case our minimum unexpired term is 90 years.
- There must be at least 30 years remaining at the end of the mortgage term (regardless of the length of lease at the start).

Where the unexpired lease term is different to that recorded on the mortgage offer, the following clarifies if we need to be informed:

Second hand property:
- If the unexpired lease term on the offer is 85 years or more - only advise us if the actual lease term is less than 85 years
- if the unexpired lease term on the offer is less than 85 years – advise us if the actual lease term is different than reported
- For equity share applications - advise us if the actual lease term is different than reported on the offer
- Where lending is over 85% of the purchase price/valuation on a second hand flat and the unexpired lease term on the offer is 90 years or more - only advise us if the actual lease term is less than 90 years.

New build property:
- If the unexpired lease term stated on the offer is 125 years (flat) / 250 years (house) or more - only advise us if the actual lease term is less than 125 years (flat) / 250 years (house)
- For equity share applications - always advise us if the actual lease term is different than reported on the offer

Lease terms such as ground rent and event fees must be reasonable at all times during the term of the lease and adhere to our requirements below. If you’re unsure as to whether the terms of a lease are unreasonable or onerous, please refer the details to us in plain English for Valuer consideration. If the potentially onerous terms are in relation to the ground rent please include the current ground rent figure per annum, how often it will be reviewed and the price structure it will be reviewed against. See the guidance below.

SECOND HAND PROPERTIES

Unacceptable - advise Issuing Office (Will be declined):
- Unexpired lease term less than 55 years
- Unexpired lease term less than 90 years where we are lending more than 85% of the purchase price/valuation on a second hand flat
- Less than 30 years remaining at the end of the mortgage term
- Ground Rent greater than 0.5% of the property value
- Ground Rent doubles less than every 20 years (e.g. doubles every 5, 10 or 15 years) - acceptable if doubles every 20 years or more
- Ground Rent is compounded RPI
- Ground Rent review period is less than or equal to 5 years

Refer to Issuing Office (Valuer will consider any impact on valuation figure and marketability):
- Unexpired lease term is 55 to 85 years
- Ground Rent greater than 0.1% and less than or equal to 0.5% of the property value
- Ground Rent escalation is linked to any indices greater than RPI
- Ground Rent escalation is linked to the value of the building*
- Ground Rent review period is greater than 5 and less than 10 years
- Event clauses exist for normal use e.g. changing the carpet, installing a TV aerial, etc
- Estate Rent Charges greater than £500 p/a (please provide details of what the charges cover)
- Service Charges greater than 1% of property value p/a (please provide details of what the charges cover)
- Anything that appears onerous, unusual or out of the ordinary

Acceptable (no requirement to advise Issuing Office):
- Unexpired lease term greater than 85 years (Minimum 90 years where we are lending more than 85% of the purchase price/valuation on a second hand flat)
- Ground Rent less than or equal to 0.1% of the property value
- Ground Rent review period greater than or equal to 10 years
- Ground Rent escalation less than or equal to RPI

NEW BUILD PROPERTIES (includes office conversions)

Unacceptable - advise Issuing Office (Will be declined)
- Unexpired lease term less than 125 years on a new build flat or less than 250 years on a new build house (does not apply to Shared Ownership)
- Any lease which is subject to a Ground Rent (or Annual Rent) being charged which is more than on a peppercorn basis
- Any lease which is subject to a Ground Rent (or Annual Rent) being charged which is more than on a peppercorn basis

Refer to Issuing Office (Valuer will consider any impact on valuation figure and marketability):
- Event clauses exist for normal use e.g. changing the carpet, installing a TV aerial etc
- Estate Rent Charges greater than £500 p/a (please provide details of what the charges cover)
- Service Charges greater than 1% of property value p/a (please provide details of what the charges cover)
- Anything else appears onerous, unusual or out of the ordinary

Acceptable (no requirement to advise Issuing Office):
- Unexpired lease term greater than or equal to 125 years on a new build flat or greater than or equal to 250 years on a new build house
- A lease subject to a peppercorn Ground Rent (Annual Rent) charges

For the avoidance of doubt, any New Build properties completed but not sold pre-30 June 2022 will only be acceptable if the Lease conforms to the above guidance.

* Where the Ground Rent escalation is linked to the value of the building, please provide the following:
- How is the value of the block/unit currently calculated and if the assessment relates to the block(s), how is the Ground Rent calculated/apportioned per property?
- The current valuation and Ground Rent for each unit
- What is the mechanism for future valuations of the block and how is the Ground Rent calculated/apportioned?
- What is the right of appeal? And is this a documented process within the lease?
- Who bears the cost of the valuation (and appeal) process?
- Confirmation the review period is not less than twenty years.

Lease Extensions

We require all Lease Extensions to be completed under the Leasehold Reform Housing and Urban Development Act 1993 and to meet the above criteria as a minimum. Where you become aware that it does not meet these requirements, please refer to Issuing Office.
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.

What makes us experts in Leighton Buzzard lease extensions?

Regardless of whether you are a tenant or a freeholder in Leighton Buzzard,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 experience and the close ties they enjoy with Leighton Buzzard valuers.

Leighton Buzzard Lease Extension Example Cases:

Lydia, Leighton Buzzard, Bedfordshire,

Following lengthy discussions with the freeholder of her first floor flat in Leighton Buzzard, Lydia initiated the lease extension process as the eighty year threshold was quickly nearing. The lease extension completed in October 2014. The landlord’s costs were negotiated to approximately 700 pounds.

Leighton Buzzard case:

In 2011 we were approached by Mr R Evans who, having owned a first floor apartment in Leighton Buzzard in August 2008. The question was if we could approximate the premium would likely be to extend the lease by a further 90 years. Similar premises in Leighton Buzzard with 100 year plus lease were worth £254,200. The mid-range amount of ground rent was £60 invoiced yearly. The lease elapsed in 2075. Taking into account 51 years remaining we calculated the compensation to the landlord for the lease extension to be within £43,700 and £50,600 exclusive of legals.

Leighton Buzzard case:

Last year we were contacted by Mr and Mrs. G Garcia , who acquired a studio flat in Leighton Buzzard in June 2005. The dilemma was if we could shed any light on how much (approximately) price would likely be to prolong the lease by ninety years. Comparable properties in Leighton Buzzard with an extended lease were worth £210,600. The average amount of ground rent was £45 billed quarterly. The lease finished in 2086. Having 62 years as a residual term we approximated the premium to the freeholder for the lease extension to be within £18,100 and £20,800 plus expenses.