When it comes to domestic leasehold premises in Luton, you are actually purchasing an entitlement to live in a property for a prescribed time frame. These days flat leases are usually granted for 99 years or 125. Many leasehold owners are unconcerned as this seems like a long period of time, you may think about a lease extension sooner rather than later. Accepted thinking is that the shorter the number of years is the cost of extending the lease increases markedly particularly once there are less than eighty years left. Leasehold owners in Luton with a lease approaching 81 years remaining should seriously consider extending it as soon as possible. When the lease term has below 80 years outstanding, under the relevant Act the freeholder is entitled to calculate and demand a larger premium, based on a technical computation, known as “marriage value” which is due.
It is conventional wisdom that a residential leasehold with more than one hundred years remaining is worth approximately the same as a freehold. Where an further ninety years added to all but the shortest lease, the residence will be equivalent in value to a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Godiva Mortgages | 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. |
| Santander | If the property is leasehold, the remaining unexpired lease term at the end of the new mortgage term must be at least 50 years where any part of the mortgage is on Interest Only and 30 years if all loan parts are on Capital Repayment and Interest. You must report the unexpired lease term to us and await our instructions if:
|
| 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 |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
Lease extensions in Luton can be a difficult process. We recommend you obtain guidance from a conveyancer and surveyor well versed in the legislation and lease extension process.
We provide you with an expert from a selection of lease extension solicitors, which ensures a targeted and efficient service as you have a dedicated port of call with an individual lawyer. Our lease extension solicitors have in-depth market knowledge dealing with Luton lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
Riley owned a studio apartment in Luton on the market with a lease of a few days over 61 years outstanding. Riley informally approached his landlord 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 initially set at £150 per annum and doubled every 25 years thereafter. Ordinarily, ground rent would not be payable on a lease extension were Riley to invoke his statutory right. Riley procured expert legal guidance and secured an acceptable deal without going to tribunal and ending up with a market value flat.
Last Spring we were approach by Mr and Mrs. N Thompson , who bought a newly refurbished flat in Luton in March 2005. We are asked if we could approximate the premium could be to extend the lease by a further 90 years. Identical homes in Luton with a long lease were in the region of £280,000. The average amount of ground rent was £55 collected quarterly. The lease ended in 2104. Taking into account 78 years remaining we calculated the premium to the freeholder for the lease extension to be between £13,300 and £15,400 exclusive of expenses.
In 2013 we were phoned by Mr B Kelly who, having took over the lease of a basement apartment in Luton in October 1997. The question was if we could estimate the price would likely be to extend the lease by 90 years. Similar premises in Luton with 100 year plus lease were in the region of £186,000. The mid-range amount of ground rent was £65 invoiced quarterly. The lease terminated in 2084. Given that there were 58 years left we approximated the compensation to the landlord to extend the lease to be between £24,700 and £28,600 exclusive of fees.