Pound Hill leases on residential properties are gradually losing value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of your lease becomes more expensive. It is the case that most Pound Hill tenants have the right to extend their lease by an additional ninety years by virtue of the 1993 Leasehold Reform Act. Where you are a leasehold owner in Pound Hill you really ought to check if your lease has between seventy and ninety years remaining. There are compelling reasons why a Pound Hill flat owner with a lease having around 80 years remaining should take action to make sure that a lease extension is effected without delay
Leasehold residencies in Pound Hill with more than one hundred years unexpired on the lease are often referred to as ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your property. In such situations there is often little to be gained by buying the freehold unless savings on ground rent and estate charges warrant it.
| Lender | Requirement |
|---|---|
| Accord Mortgages | 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. |
| 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; |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| 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. |
| Godiva Mortgages | 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. |
The conveyancing solicitors that we work with procure Pound Hill 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.
Daniel was the the leasehold proprietor of a 2 bedroom apartment in Pound Hill on the market with a lease of a few days over sixty years remaining. Daniel on an informal basis contacted his freeholder a well known Bristol-based freehold company and enquired on a premium to extend the lease. The landlord was keen to grant an extension on non-statutory terms taking the lease to 125 years on the basis of an increased rent to £200 per annum. Ordinarily, ground rent would not be due on a lease extension were Daniel to invoke his statutory right. Daniel procured expert advice and was able to make an informed judgement and handle with the matter and readily saleable.
Last Summer we were approach by Dr Dylan Bonnet , who completed a one bedroom apartment in Pound Hill in January 2000. We are asked if we could estimate the premium would likely be to prolong the lease by a further 90 years. Similar flats in Pound Hill with 100 year plus lease were worth £235,600. The mid-range amount of ground rent was £60 invoiced quarterly. The lease expired in 2088. Having 62 years as a residual term we estimated the compensation to the freeholder to extend the lease to be within £21,900 and £25,200 exclusive of legals.
Last November we were called by Mr and Mrs. H Rogers , who took over the lease of a garden flat in Pound Hill in May 2002. The dilemma was if we could shed any light on how much (roughly) premium could be for a 90 year lease extension. Comparable residencies in Pound Hill with an extended lease were in the region of £174,200. The mid-range amount of ground rent was £55 collected quarterly. The lease terminated in 2077. Taking into account 51 years unexpired we estimated the premium to the freeholder to extend the lease to be between £31,400 and £36,200 not including expenses.