When it comes to domestic leasehold property in Dunstable, you effectively rent it for a certain amount of time. In recent years flat leases are usually granted for 99 years or 125. Even though this may appear like a lengthy period of time, you should consider extending the lease sooner rather than later. Accepted thinking is that the shorter the lease is the cost of extending the lease increases markedly notably when there are fewer than eighty years remaining. Leasehold owners in Dunstable with a lease drawing near to 81 years unexpired should seriously think of extending it as soon as possible. Once the lease term has below eighty years remaining, under the relevant Act the landlord is entitled to calculate and demand a greater premium, based on a technical calculation, known as “marriage value” which is due.
It is generally accepted that a property with in excess of one hundred years remaining is worth approximately the equivalent as a freehold. Where an further ninety years added to all but the shortest lease, the property will be equivalent in value to a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
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 conveyancing solicitor we work with provide it.
Last October Charlie, came very close to the eighty-year threshold with the lease on his two bedroom apartment in Dunstable. In buying his property two decades ago, the lease term was of no relevance. As luck would have it, he noticed he would soon be paying way over the odds for Extending the lease. Charlie was able to extend his lease just under the wire in May. Charlie and the landlord in the end agreed on an amount of £5,500 . If the lease had dropped lower than 80 years, the premium would have increased by a minimum £900.
In 2009 we were e-mailed by Mr and Mrs. D Robinson who, having owned a one bedroom apartment in Dunstable in January 2003. We are asked if we could estimate the price could be for a ninety year lease extension. Identical residencies in Dunstable with an extended lease were valued about £206,200. The mid-range amount of ground rent was £60 invoiced quarterly. The lease lapsed on 13 May 2082. Taking into account 56 years outstanding we calculated the compensation to the freeholder to extend the lease to be within £32,300 and £37,400 exclusive of expenses.
Mrs Amy Jackson completed a studio flat in Dunstable in September 2001. The question was if we could approximate the price would likely be to prolong the lease by ninety years. Comparable homes in Dunstable with an extended lease were in the region of £300,000. The mid-range ground rent payable was £50 collected per annum. The lease expired in 2102. Considering the 76 years outstanding we approximated the premium to the freeholder for the lease extension to be between £8,600 and £9,800 not including costs.