Owning a apartment usually means owning a lease of the property, this is a ‘time-limited’ interest becoming shorter every day. This lease will usually be granted for a fixed period of time , usually 99 or 125 years, although we have seen longer and shorter terms in Dunstable. Inevitably, the term of lease left shortens as time goes by. This is often ignored and only becomes a problem when the residence needs to be sold or re-mortgaged. The shorter the lease the less it is worth and the more expensive it will be to obtain a lease extension. Qualifying leaseholders in Dunstable have the right to extend the lease for an additional 90 years in accordance with Leasehold Reform legislation. You should give due attention before delaying your Dunstable lease extension. Putting off that expense now likely increases the price you will eventually incur to extend your lease
Leasehold residencies in Dunstable with over one hundred years left on the lease are often referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your premises. In such circumstances there is often little upside in purchasing the freehold unless savings on ground rent and maintenance charges warrant 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. |
| 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. |
| 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. |
| 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 |
The conveyancers that we work with undertake Dunstable 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.
Ibrahim was the the leasehold owner of a conversion flat in Dunstable on the market with a lease of just over sixty years outstanding. Ibrahim informally spoke with his freeholder being a well known Manchester-based freehold company and enquired on a premium to extend the lease. The landlord was prepared to grant an extension on non-statutory terms taking the lease to 125 years subject to a new rent initially set at £150 per annum and increase every 25 years thereafter. No ground rent would be payable on a lease extension were Ibrahim to exercise his statutory right. Ibrahim obtained expert advice and secured satisfactory deal informally and sell the property.
In 2014 we were approached by Mr and Mrs. Y Mercier who, having purchased a ground floor apartment in Dunstable in March 2012. The dilemma was if we could approximate the compensation to the landlord would be for a 90 year lease extension. Comparable premises in Dunstable with an extended lease were worth £196,400. The average amount of ground rent was £55 invoiced yearly. The lease expiry date was in 2080. Given that there were 54 years left we estimated the premium to the freeholder for the lease extension to be within £35,200 and £40,600 plus professional charges.
In 2009 we were approached by Mr and Mrs. J Harris who, having moved into a garden apartment in Dunstable in April 2008. We are asked if we could approximate the price would likely be for a 90 year lease extension. Comparable flats in Dunstable with an extended lease were worth £295,000. The average amount of ground rent was £45 collected every twelve months. The lease lapsed in 2101. Taking into account 75 years remaining we approximated the premium to the landlord for the lease extension to be between £8,600 and £9,800 not including costs.