For anyone whose Luton flat is held on a long lease, our message is clear – if you ignore the situation, the property will ultimately revert to the freeholder, leaving you empty-handed. The shorter the lease the lower the value of the property and the more expensive it will be to extend the lease.
It is generally accepted that a property with over 100 years remaining is worth approximately the equivalent as a freehold. Where an additional 90 years added to all but the shortest lease, the residence will be equivalent in value to a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Chelsea Building Society | 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| Santander | You must report the unexpired lease term to us and await our instructions if: 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 2. the unexpired term assumed by our valuer is more than 82 years but the actual unexpired term is less than 82 years; or 3. no valuation report is provided However, we will not accept a lease where on expiry of the mortgage: (i) less than 50 years remain and all or part of the loan is repaid on an interest-only basis: or (ii) less than 30 years remain and the loan is repaid on a capital and interest basis 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. |
| 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 get guidance from a lawyer and surveyor with experience in lease extensions.
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 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.
Jonathan was the the leasehold proprietor of a 2 bedroom apartment in Luton on the market with a lease of a few days over 61 years outstanding. Jonathan informally approached his landlord a well known local-based freehold company for a lease extension. The landlord indicated a willingness to extend the lease to 125 years on the basis of a new rent initially set at £200 per annum and doubled every twenty five years thereafter. No ground rent would be payable on a lease extension were Jonathan to invoke his statutory right. Jonathan procured expert advice and secured satisfactory deal without going to tribunal and readily saleable.
Last Christmas we were e-mailed by Mr and Mrs. N Morel , who bought a one bedroom flat in Luton in February 1995. The dilemma was if we could estimate the premium would likely be to extend the lease by ninety years. Comparative flats in Luton with a long lease were in the region of £285,000. The average amount of ground rent was £55 invoiced monthly. The lease lapsed in 2106. Having 80 years outstanding we approximated the compensation to the freeholder to extend the lease to be between £12,400 and £14,200 exclusive of legals.
Last year we were phoned by Ms Y Martínez , who bought a one bedroom apartment in Luton in May 2010. The dilemma was if we could shed any light on how much (roughly) price could be to prolong the lease by an additional years. Identical properties in Luton with 100 year plus lease were in the region of £200,800. The mid-range ground rent payable was £65 invoiced per annum. The lease elapsed on 7 February 2086. Considering the 60 years unexpired we estimated the premium to the freeholder to extend the lease to be within £20,900 and £24,200 exclusive of expenses.