The re-sale value of a leasehold property in Luton is impacted by how many years the lease has left to run. If it is near to or fewer than eighty years you should expect difficulties on re-sale, so it is advisable to arrange for the lease to be extended before buying. It is preferable to commence the lease extension process when the lease still has 82 years remaining so that a lease extension can be finalised prior to the 80 year mark. Leasehold Reform legislation entitles Luton qualifying lessees to a ninety year extension added to their residual lease term (ie if your lease has fifty years remaining the statutory lease extension will provide a new term of 140 years). The purpose of the valuation is to arrive at an opinion of the sum payable by the lessee to the freeholder for the purchase of the lease extension.
Leasehold residencies in Luton with more than 100 years outstanding on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your premises. In such situations there is often little to be gained by buying the reversionary interest unless savings on ground rent and estate charges merit it.
| Lender | Requirement |
|---|---|
| Halifax | Minimum 70 years from the date of the mortgage. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 30 years plus the term of the mortgage at the outset of the mortgage. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
Lease extensions in Luton can be a difficult process. We recommend you secure professional help from a conveyancing solicitor 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 a wealth of experience procuring Luton lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
During the course of the last few months John, came seriously near to the 80-year threshold with the lease on his garden flat in Luton. Having purchased his flat two decades ago, the unexpired term was of minimal relevance. Thankfully, he recognised he needed to take action soon on a lease extension. John was able to extend his lease just under the wire in August. John and the landlord subsequently settled on a premium of £5,500 . If the lease had gone below 80 years, the amount would have become more costly by a minimum £1,000.
In 2014 we were e-mailed by Mr and Mrs. P Morel who, having took over the lease of a garden apartment in Luton in January 1996. We are asked if we could approximate the premium would be to prolong the lease by 90 years. Identical residencies in Luton with 100 year plus lease were valued about £250,000. The mid-range amount of ground rent was £50 collected monthly. The lease expiry date was on 4 April 2096. Taking into account 70 years unexpired we estimated the compensation to the freeholder to extend the lease to be within £9,500 and £11,000 not including legals.
Dr A Cox owned a garden flat in Luton in August 2005. We are asked if we could shed any light on how much (approximately) premium would likely be to prolong the lease by ninety years. Comparative properties in Luton with 100 year plus lease were valued about £246,800. The average ground rent payable was £60 billed yearly. The lease termination date was in 2076. Given that there were 50 years remaining we calculated the compensation to the freeholder to extend the lease to be between £44,700 and £51,600 exclusive of professional charges.