The re-sale value of a leasehold property in Dunstable is impacted by how many years the lease has remaining. If it is close to or less than eighty years you should foresee problems on re-sale, so it is recommended to arrange for a lease extension ahead of buying. It is ideal to start the process of extending the lease is when the lease still has 82 years remaining so that a lease extension can be finalised well before the 80 year cut off point. Statute entitles Dunstable qualifying lessees to obtain a lease extension of 90 years in addition to the remaining lease term at a peppercorn rent (that is, rent free). The purpose of the valuation is to determine the amount payable by the lessee to the freeholder for the acquisition of the lease extension.
Leasehold premises in Dunstable with in excess of one hundred years outstanding 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 to be gained by buying the reversionary interest unless savings on ground rent and maintenance charges warrant it.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| 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. |
| 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. |
The conveyancers that we work with procure 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.
Elijah owned a studio apartment in Dunstable on the market with a lease of a little over fifty eight years remaining. Elijah on an informal basis contacted his freeholder a well known Bristol-based freehold company and enquired on a premium to extend the lease. The freeholder indicated a willingness to extend the lease to 125 years subject to an increased rent to £125 annually. No ground rent would be payable on a lease extension were Elijah to invoke his statutory right. Elijah procured expert legal guidance and was able to make a more informed judgement and handle with the matter and ending up with a market value flat.
In 2014 we were e-mailed by Dr Milo Mitchell who, having acquired a one bedroom flat in Dunstable in August 2009. We are asked if we could approximate the premium would be for a 90 year extension to my lease. Similar premises in Dunstable with 100 year plus lease were in the region of £191,400. The average amount of ground rent was £55 billed quarterly. The lease terminated in 2079. Considering the 54 years unexpired we approximated the compensation to the freeholder to extend the lease to be within £34,200 and £39,600 exclusive of fees.
In 2009 we were phoned by Dr V Mason who, having took over the lease of a basement apartment in Dunstable in February 2006. We are asked if we could estimate the premium would likely be to extend the lease by an additional years. Similar residencies in Dunstable with 100 year plus lease were valued around £295,000. The average amount of ground rent was £45 billed quarterly. The lease ended in 2099. Considering the 74 years as a residual term we estimated the premium to the landlord to extend the lease to be within £9,500 and £11,000 exclusive of expenses.