It’s a harsh truth that a Luton residential lease is a deteriorating asset. The lease value drops in proportion to its lease length. The extent of this is taken for granted in the early years due to the loss of value being disguised by increases in the Luton property market.Where your lease has approximately 90 years left, you need to start considering a lease extension. If the number of years remaining falls below eighty years, you will end up paying 50% of the property's 'marriage value' on top of the usual cost of the lease extension to the landlord. Marriage value is the amount of additional value that a lease extension will add the property The majority of leasehold owners in Luton will be able to extend under the legislation; however a lawyer will be able to clarify whether you qualify for an extension. In some situations you may not qualify. There are also strict timeframes and procedures to be adhered to once the process has commenced and you will need to be guided by your conveyancing solicitor throughout the process.
It is generally accepted that a residential leasehold with more than 100 years remaining is worth roughly the same as a freehold. Where an further ninety years added to all but the shortest lease, the residence will be worth the same as a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Halifax | Minimum 70 years from the date 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. |
| Yorkshire 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. |
Lease extensions in Luton can be a difficult process. We recommend you get guidance from a conveyancing solicitor and valuer with experience in this area.
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 Aarav, started to get near to the 80-year threshold with the lease on his first floor apartment in Luton. In buying his property 18 years previously, the length of the lease was of no importance. Fortunately, he noticed he would soon be paying an inflated amount for a lease extension. Aarav arranged for a lease extension just under the wire last April. Aarav and the landlord who owned the flat above eventually agreed on an amount of £5,500 . If he not met the deadline, the amount would have increased by at least £1,000.
Last Christmas we were called by Mr and Mrs. H Ali , who purchased a newly refurbished apartment in Luton in August 1996. We are asked if we could shed any light on how much (roughly) compensation to the landlord could be to prolong the lease by ninety years. Comparative homes in Luton with a long lease were valued around £256,600. The mid-range amount of ground rent was £60 invoiced quarterly. The lease ran out on 14 July 2077. Given that there were 52 years remaining we approximated the compensation to the landlord for the lease extension to be between £39,000 and £45,000 not including legals.
Mr Tyler Laurent completed a ground floor flat in Luton in June 2012. The question was if we could shed any light on how much (roughly) price could be for a ninety year extension to my lease. Similar flats in Luton with a long lease were valued around £218,000. The average ground rent payable was £45 collected annually. The lease finished on 4 January 2088. Taking into account 63 years remaining we estimated the compensation to the landlord for the lease extension to be within £17,100 and £19,800 plus costs.