The re-sale value of a leasehold property in Poole is impacted by how many years the lease has remaining. If it is close to or fewer than 80 years you should foresee difficulties on re-sale, so it is advisable to arrange for the lease to be extended before purchasing. It is preferable to commence the process of extending the lease is when a lease still has 82 years remaining so that a lease extension can be finalised in advance of the eighty year cut off point. Statute enables Poole qualifying lessees to obtain a new lease which will be for the current unexpired lease term plus an additional term of ninety years. The purpose of the valuation is to arrive at an opinion of the premium payable by the lessee to the freeholder for the purchase of the lease extension.
It is conventional wisdom that a property with over one hundred years unexpired lease term is worth approximately the equivalent as a freehold. Where an further ninety years added to all but the shortest lease, the premises will be worth the same as a freehold for decades to come.
| Lender | Requirement |
|---|---|
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage should be declined (see exception below). Leases with greater than 70 years but fewer than 85 years remaining must be referred to issuing office. 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; |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
| 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. |
Retaining our service will provide you increased control over the value of your Poole leasehold, as your property will be more valuable and marketable in relation to the 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.
Hunter was the the leasehold proprietor of a studio apartment in Poole on the market with a lease of a little over 72 years remaining. Hunter on an informal basis spoke with his landlord a well known London-based freehold company for a lease extension. The freeholder was prepared to grant an extension on non-statutory terms taking the lease to 125 years subject to an increased rent to £200 yearly. Ordinarily, ground rent would not be payable on a lease extension were Hunter to invoke his statutory right. Hunter procured expert advice and was able to make an informed judgement and handle with the matter and sell the flat.
Mr O Rodríguez completed a basement apartment in Poole in September 2011. The dilemma was if we could approximate the price could be to prolong the lease by ninety years. Comparable flats in Poole with a long lease were valued about £285,000. The mid-range ground rent payable was £55 billed monthly. The lease end date was in 2105. Taking into account 80 years left we estimated the compensation to the freeholder for the lease extension to be within £12,400 and £14,200 plus legals.
Mr and Mrs. V Reed bought a purpose-built apartment in Poole in April 2010. We are asked if we could approximate the price would likely be to extend the lease by a further 90 years. Comparable homes in Poole with 100 year plus lease were in the region of £200,800. The mid-range amount of ground rent was £65 invoiced monthly. The lease came to a finish in 2085. Considering the 60 years as a residual term we estimated the premium to the landlord to extend the lease to be between £20,900 and £24,200 not including fees.