Luton leases on domestic deteriorating in value. Where your lease has about 90 years unexpired, you should start thinking about a lease extension. An important point to note is that it is financially advisable for the lease extension to be in place before the term of the current lease falls lower than 80 years - otherwise a higher premium will be payable. Flat owners in Luton will mostly qualify for a lease extension; however a solicitor will confirm your eligibility. In certain cases you may not be entitled. There are prescribed timetables and steps to follow once the process has started so it’s sensible to be guided by a conveyancing solicitor during the process.
Leasehold properties in Luton with over one hundred years unexpired on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease value 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 service 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. |
| 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; |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| Yorkshire 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. |
The conveyancing solicitors that we work with handle Luton 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 lawyer we work with provide it.
In recent months Jude, came perilously close to the eighty-year threshold with the lease on his leasehold flat in Luton. Having purchased his home 19 years previously, the lease term was of minimal significance. As luck would have it, he noticed he needed to take action soon on a lease extension. Jude was able to extend his lease at the eleventh hour last June. Jude and the landlord ultimately settled on a premium of £5,500 . If he not met the deadline, the premium would have escalated by a minimum £925.
Last June we were e-mailed by Dr Harvey Campbell , who purchased a one bedroom apartment in Luton in June 2009. We are asked if we could shed any light on how much (roughly) premium would likely be for a ninety year extension to my lease. Comparable premises in Luton with 100 year plus lease were valued around £235,200. The average ground rent payable was £45 billed quarterly. The lease termination date was in 2090. Having 66 years as a residual term we calculated the premium to the landlord for the lease extension to be within £12,400 and £14,200 not including legals.
Last year we were approach by Mr and Mrs. F Fournier , who completed a first floor flat in Luton in March 2005. We are asked if we could approximate the price could be to prolong the lease by 90 years. Similar homes in Luton with an extended lease were in the region of £275,000. The mid-range ground rent payable was £55 billed per annum. The lease ran out in 2101. Given that there were 77 years outstanding we approximated the premium to the freeholder for the lease extension to be between £13,300 and £15,400 not including professional charges.