Unfortunately that a Dunstable residential lease is a deteriorating asset. The lease value reduces in proportion to its lease length. The extent of this is taken for granted in the early years due to the depreciation being disguised by increases in the Dunstable property prices.Where your lease has approximately 90 years left, you should start thinking about a lease extension. If the number of years remaining falls under 80 years, you will end up paying 50% of the property's 'marriage value' on top of the usual cost of the lease extension to the landlord. The marriage fee is the amount of additional value that a lease extension will add the property Most flat owners in Dunstable will be able to extend under the legislation; however a lawyer will be able to clarify whether you qualify for an extension. In some situations you may not be entitled. There are also strict deadlines and procedures to be adhered to once the process is instigated and you will need to be guided by your conveyancer from beginning to end of the process.
It is conventional wisdom that a property with in excess of 100 years remaining is worth approximately the equivalent as a freehold. Where an additional 90 years added to all but the shortest lease, the premises will be equivalent in value to a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| 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. |
| Leeds Building Society | 85 years remaining from the start 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. |
| 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 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 conveyancer we work with provide it.
David owned a 2 bedroom flat in Dunstable on the market with a lease of a little over sixty years left. David informally approached his freeholder being a well known local-based freehold company for a lease extension. The landlord indicated a willingness to grant an extension taking the lease to 125 years on the basis of a new rent at the outset set at £200 per annum and doubled every twenty five years thereafter. No ground rent would be due on a lease extension were David to invoke his statutory right. David procured expert advice and was able to make a more informed judgement and deal with the matter and ending up with a market value flat.
Mrs F Morris owned a one bedroom flat in Dunstable in August 2005. The dilemma was if we could estimate the compensation to the landlord could be for a ninety year lease extension. Comparable homes in Dunstable with an extended lease were in the region of £248,000. The mid-range ground rent payable was £65 billed per annum. The lease finished on 4 March 2088. Considering the 63 years as a residual term we approximated the premium to the freeholder for the lease extension to be within £20,900 and £24,200 plus costs.
Mr and Mrs. H Roberts moved into a basement flat in Dunstable in March 2005. We are asked if we could approximate the compensation to the landlord would be for a ninety year lease extension. Comparable residencies in Dunstable with an extended lease were worth £181,600. The average amount of ground rent was £55 invoiced annually. The lease finished in 2077. Taking into account 52 years left we estimated the premium to the freeholder to extend the lease to be between £30,400 and £35,200 exclusive of expenses.