Chances are that if you own a flat in Luton you actually own a long leasehold interest over your property
Leasehold premises in Luton with in excess of one hundred years left on the lease are often regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your premises. In such situations there is often little to be gained by purchasing the reversionary interest unless savings on ground rent and estate charges merit it.
| Lender | Requirement |
|---|---|
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage are not acceptable. 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: • 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 • The value of the property subject to the short remaining term is £500,000 or more AND • 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; |
| 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. |
| 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 |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
The conveyancers that we work with handle Luton 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 lawyer we work with provide it.
Last October Liam, came seriously near to the 80-year threshold with the lease on his one bedroom apartment in Luton. In buying his flat two decades ago, the lease term was of no interest. Thankfully, he became aware that he would soon be paying an escalated premium for a lease extension. Liam arranged for a lease extension at the eleventh hour last January. Liam and the freeholder via the managing agents in the end agreed on an amount of £5,000 . If he had missed the deadline, the price would have escalated by at least £1,050.
Mr and Mrs. O Robinson completed a studio apartment in Luton in February 1997. The dilemma was if we could shed any light on how much (roughly) compensation to the landlord would likely be to prolong the lease by ninety years. Similar flats in Luton with 100 year plus lease were worth £235,200. The average ground rent payable was £45 invoiced quarterly. The lease finished in 2092. Having 66 years remaining we estimated the premium to the freeholder for the lease extension to be between £12,400 and £14,200 not including legals.
Last year we were contacted by Ms K Davies , who was assigned a lease of a basement apartment in Luton in August 1999. The question was if we could shed any light on how much (approximately) compensation to the landlord would be to extend the lease by a further 90 years. Comparative residencies in Luton with a long lease were worth £275,000. The mid-range amount of ground rent was £55 billed yearly. The lease end date was on 23 March 2103. Given that there were 77 years outstanding we calculated the premium to the freeholder to extend the lease to be between £13,300 and £15,400 exclusive of costs.