Owning a apartment usually means owning a lease of the property, which has a finite term of years. The lease will normally be granted for a prescribed period of time , ordinarily 99 or 125 years, although we have come across longer and shorter terms in Poundbury. Inevitably, the length of lease remaining shortens as time goes by. This may pass by relatively unnoticed when the property needs to be sold or re-mortgaged. The shorter the lease the less it is worth and the more expensive it will be to obtain a lease extension. Eligible leaseholders in Poundbury have the right to extend the lease for a further 90 years in accordance with Leasehold Reform legislation. Please give careful attention before putting off your Poundbury lease extension. Putting off the cost now only increases the price you will ultimately have to pay for a lease extension
It is conventional wisdom that a residential leasehold with more than 100 years unexpired lease term is worth approximately the same as a freehold. Where an additional 90 years added to all but the shortest lease, the property will be worth the same as a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| 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. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 75 years plus the term of the mortgage at the outset 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. |
Using our service will provide you enhanced control over the value of your Poundbury leasehold, as your property will be more valuable and saleable in relation to the lease length should you want to sell. The lawyers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Trailing protracted negotiations with the freeholder of her studio apartment in Poundbury, Catherine commenced the lease extension process just as her lease was coming close to the critical eighty-year threshold. The legal work was finalised in November 2006. The freeholder’s fees were negotiated to approximately 550 pounds.
Dr Blake Gray owned a purpose-built flat in Poundbury in July 2012. We are asked if we could estimate the premium would likely be to extend the lease by an additional years. Comparative premises in Poundbury with 100 year plus lease were in the region of £267,600. The mid-range ground rent payable was £65 collected monthly. The lease ran out on 21 November 2093. Considering the 67 years remaining we approximated the compensation to the landlord to extend the lease to be between £14,300 and £16,400 exclusive of professional charges.
In 2011 we were contacted by Mr P Adams who, having purchased a basement flat in Poundbury in June 2007. We are asked if we could approximate the premium could be to extend the lease by an additional years. Similar flats in Poundbury with an extended lease were valued around £206,200. The average amount of ground rent was £60 billed every twelve months. The lease finished in 2082. Having 56 years outstanding we approximated the compensation to the freeholder for the lease extension to be within £31,400 and £36,200 plus expenses.