Poundbury leases on domestic deteriorating in value. if your lease has in the region of ninety years left, you should start thinking about a lease extension. It is important to recognise that it is that it is financially advisable for the lease extension to take place before the term of the existing lease dips under 80 years - otherwise a higher premium will be due. Flat owners in Poundbury will mostly be legally entitled to a lease extension; however it’s a good idea to check with a lawyer to check if you qualify. In certain circumstances you may not be entitled. There are also strict timetables and formalities to follow once the process is triggered so it’s best to be guided by a conveyancing solicitor during the process.
It is generally considered that a property with over one hundred years remaining is worth approximately the equivalent as a freehold. Where an additional 90 years added to all but the shortest lease, the premises will be worth the same as a freehold for many years ahead.
| 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. |
| 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. |
| 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 |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
Engaging our service will provide you increased control over the value of your Poundbury leasehold, as your property will be more valuable and saleable in terms of lease length should you wish to sell. The lawyers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Last year Ben, started to get near to the 80-year mark with the lease on his purpose- built flat in Poundbury. In buying his flat two decades ago, the length of the lease was of minimal relevance. As luck would have it, it dawned on him that he needed to take steps soon on Extending the lease. Ben extended the lease at the eleventh hour in March. Ben and the landlord subsequently agreed on a premium of £5,500 . If the lease had dropped to less than 80 years, the price would have become more costly by at least £1,125.
Dr Georgina Fournier moved into a ground floor apartment in Poundbury in September 1996. The question was if we could estimate the price would likely be for a 90 year extension to my lease. Comparable homes in Poundbury with 100 year plus lease were worth £200,000. The mid-range ground rent payable was £50 collected monthly. The lease concluded on 11 June 2102. Having 77 years as a residual term we estimated the compensation to the landlord to extend the lease to be between £8,600 and £9,800 not including fees.
In 2011 we were phoned by Mr and Mrs. R Rose who, having purchased a one bedroom apartment in Poundbury in September 2010. We are asked if we could estimate the premium could be for a ninety year lease extension. Identical residencies in Poundbury with an extended lease were valued about £260,200. The mid-range ground rent payable was £65 billed annually. The lease end date was in 2091. Taking into account 66 years left we estimated the compensation to the landlord for the lease extension to be within £15,200 and £17,600 not including fees.