Main reasons to start your Luton lease extension
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Main reasons to start your Luton lease extension today:
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<h4> A <a href="http://www.lendermonitor.com/conveyancing/loc/luton">Luton</a> leasehold property depreciates with the years remaining on the lease.
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Luton leases on residential properties are gradually losing value. The shorter the remaining lease term becomes, the less it is worth – and accordingly any extension of the lease becomes more expensive. It is the case that most Luton tenants have the right to extend their lease by an additional 90 years under the 1993 Leasehold Reform Act. If you are a leasehold owner in Luton you must see if your lease has between seventy and 90 years remaining. In particular once the remaining lease term slips under 80 years, the amount payable for any lease extension increases dramatically as an element of the premium you pay is what is known as a marriage value <h4>Luton property with a lease extension is almost the same value as a freehold</h4>
<p> It is generally considered that a property with in excess of 100 years remaining is worth roughly the equivalent as a freehold. Where an additional ninety years added to all but the shortest lease, the residence will be worth the same as a freehold for many years ahead.
<h4>Lending institutions will not grant a mortgage on a short lease</h4>
The propensity since over the last decade has been for mortgage companies to tighten lending criteria across the board - this has extended to the property over which the mortgage is to be granted. This has resulted in the unexpired lease term required by banks has increased. In the past banks were content with twenty years plus the term of the loan - typically 50 year leases but those requirements are being increasingly undermined by the requirement for lengthy leases - many use a minimum term of 75 years as standard.
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<th> Requirement
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<td>Accord Mortgages</td>
<td> 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.
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<td>Bank of Scotland</td>
<td> Minimum 70 years from the date of the mortgage.
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<td>Barclays plc</td>
<td> Leases with less than 70 years at the commencement of the mortgage should be declined (see exception below).<br /><br />Leases with greater than 70 years but fewer than 85 years remaining must be referred to issuing office.<br /><br />Leases with fewer than 70 years should only be referred to the issuing office where the following scenario applies, as discretion may be applied subject to bank approval:<br /><br />• Property is located in any of the following prestigious developments: Cadogan, Crown, Grosvenor, Howard de Walden, Portman or Wellcome Trust Estates in Central London AND<br />• The value of the property subject to the short remaining term is £500,000 or more AND<br />• The loan to value does not exceed 90% for purchases, 90% like for like re-mortgages, 80% for re-mortgages with any element of capital raising and 80% for existing Barclays mortgage borrowers applying for additional borrowing;
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<td>Santander</td>
<td> You must report the unexpired lease term to us and await our instructions if: <br />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<br />2. the unexpired term assumed by our valuer is more than 82 years but the actual unexpired term is less than 82 years; or<br />3. no valuation report is provided<br />However, we will not accept a lease where on expiry of the mortgage:<br />(i) less than 50 years remain and all or part of the loan is repaid on an interest-only basis: or<br />(ii) less than 30 years remain and the loan is repaid on a capital and interest basis<br /><br />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.
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<td>TSB</td>
<td> Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption.
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Why use us for your lease extension in Luton? </h4>
<p> Retaining our service gives you better control over the value of your Luton leasehold, as your property will be more valuable and marketable in respect of lease length should you decide to sell.
The conveyancers that we work with have a wealth of experience of handling many hundreds of lease extensions or freehold purchase transactions. <h4>
Luton Lease Extension Case Studies:
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<h5> Matthew, Luton, Bedfordshire,</h5>
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Matthew owned a conversion apartment in Luton being sold with a lease of a little over 61 years remaining. Matthew on an informal basis spoke with his landlord being a well known local-based freehold company for a lease extension. The landlord was keen to grant an extension on non-statutory terms taking the lease to 125 years subject to a rise in the rent to £50 per annum. Ordinarily, ground rent would not be due on a lease extension were Matthew to exercise his statutory right. Matthew procured expert advice and secured satisfactory deal informally and readily saleable.
<h5>Luton case:</h5>
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Last Christmas we were called by Dr M Williams , who
moved into a garden flat in Luton in June 2009. The question was if we could approximate the premium would likely be to extend the lease by 90 years. Identical residencies in Luton with a long lease were valued about £264,000. The mid-range ground rent payable was £60 invoiced monthly. The lease elapsed on 26 November 2079. Given that there were 53 years outstanding we estimated the compensation to the freeholder for the lease extension to be within £37,100 and £42,800 exclusive of expenses.
<h5>Luton case:</h5>
<p> Mr and Mrs. L Mitchell bought a one bedroom flat in Luton in July 1998. We are asked if we could shed any light on how much (roughly) compensation to the landlord could be for a 90 year lease extension. Identical premises in Luton with 100 year plus lease were worth £220,400. The average amount of ground rent was £45 billed quarterly. The lease lapsed in 2090. Given that there were 64 years outstanding we estimated the premium to the landlord to extend the lease to be within £15,200 and £17,600 not including expenses.
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