The market value of Luton leasehold residential property falls as the lease term becomes shorter and this will have an impact on its saleability. The cost of extending the lease can escalate materialy once the remaining term is below than eighty years
Leasehold premises in Luton with over 100 years left 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 home. In such situations there is often little to be gained by buying 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. |
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
Regardless of whether you are a tenant or a landlord in Luton,the lease extension experts that we work with will always be prepared to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with Luton valuers.
Jasper owned a conversion apartment in Luton on the market with a lease of a little over fifty eight years unexpired. Jasper informally contacted his landlord a well known Bristol-based freehold company and enquired on a premium to extend the lease. The freeholder indicated a willingness to grant an extension taking the lease to 125 years on the basis of a rise in the rent to £100 annually. No ground rent would be due on a lease extension were Jasper to exercise his statutory right. Jasper procured expert advice and secured satisfactory deal without resorting to tribunal and sell the flat.
Last Spring we were approach by Mr K Davis , who owned a one bedroom flat in Luton in April 1996. The question was if we could approximate the price could be for a ninety year extension to my lease. Identical premises in Luton with 100 year plus lease were valued around £220,400. The mid-range amount of ground rent was £45 invoiced yearly. The lease lapsed on 4 May 2090. Taking into account 64 years outstanding we calculated the premium to the landlord to extend the lease to be between £15,200 and £17,600 plus legals.
In 2010 we were approached by Mr and Mrs. A Lee who, having acquired a basement apartment in Luton in January 2007. We are asked if we could approximate the price would likely be to extend the lease by an additional years. Similar residencies in Luton with a long lease were valued around £270,000. The average amount of ground rent was £55 billed annually. The lease came to a finish in 2101. Given that there were 75 years unexpired we calculated the premium to the freeholder to extend the lease to be within £9,500 and £11,000 not including fees.