Luton residential property held on a long lease is a depreciating asset as the leaseholder only owns the property for a set term.
Leasehold residencies in Luton with over 100 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 purchasing the freehold unless savings on ground rent and estate charges merit 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. |
| 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. |
| Lloyds TSB Scotland | Minimum 70 years from the date 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. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
The lawyers that we work with procure 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 conveyancer we work with provide it.
Trailing unsuccessful negotiations with the freeholder of her first floor apartment in Luton, Kelsey commenced the lease extension process as the eighty year deadline was fast nearing. The lease extension was concluded in January 2008. The freeholder’s fees were kept to an absolute minimum.
Dr Anna Petit was assigned a lease of a purpose-built apartment in Luton in January 2007. We are asked if we could estimate the premium would be for a ninety year lease extension. Comparable properties in Luton with an extended lease were worth £254,200. The average ground rent payable was £60 billed quarterly. The lease came to a finish in 2076. Given that there were 51 years as a residual term we calculated the premium to the freeholder for the lease extension to be between £43,700 and £50,600 plus expenses.
In 2014 we were phoned by Dr Tia King who, having purchased a basement apartment in Luton in January 2005. The dilemma was if we could estimate the price would likely be to extend the lease by an additional years. Comparable premises in Luton with an extended lease were in the region of £210,600. The average ground rent payable was £45 collected yearly. The lease termination date was in 2087. Given that there were 62 years as a residual term we calculated the premium to the freeholder to extend the lease to be between £18,100 and £20,800 not including fees.