With a residential leasehold property in Poundbury, you effectively rent it for a certain amount of time. In recent years flat leases are usually granted for 99 years or 125. Many leasehold owners are unconcerned as this seems like a long period of time, you may think about extending the lease sooner rather than later. Accepted thinking is that the shorter the lease is the cost of extending the lease gets disproportionately greater particularly when there are less than eighty years left. Residents in Poundbury with a lease drawing near to 81 years unexpired should seriously think of extending it sooner rather than later. Once the lease term has below 80 years remaining, under the current Act the freeholder can calculate and charge a larger premium, based on a technical calculation, known as “marriage value” which is due.
Leasehold premises in Poundbury with more than 100 years remaining on the lease are often regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your premises. In such situations there is often little upside in purchasing the reversionary interest unless savings on ground rent and service charges warrant it.
| Lender | Requirement |
|---|---|
| Chelsea 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. |
| 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. |
| 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. |
| 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. |
Irrespective of whether you are a tenant or a freeholder in Poundbury,the lease extension solicitors that we work with will always be willing to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with Poundbury valuers.
Trailing lengthy discussions with the landlord of her ground floor flat in Poundbury, Rosie commenced the lease extension process just as her lease was coming close to the crucial 80-year deadline. The legal work was finalised in October 2005. The landlord’s costs were kept to an absolute minimum.
In 2010 we were contacted by Mr and Mrs. J Bonnet who, having took over the lease of a studio apartment in Poundbury in April 1995. The question was if we could shed any light on how much (approximately) premium would be for a 90 year extension to my lease. Identical flats in Poundbury with an extended lease were valued around £205,000. The mid-range ground rent payable was £50 collected annually. The lease came to a finish in 2105. Given that there were 79 years as a residual term we approximated the compensation to the freeholder to extend the lease to be between £8,600 and £9,800 not including professional charges.
Dr U Williams owned a ground floor flat in Poundbury in May 2005. We are asked if we could approximate the price would likely be for a ninety year extension to my lease. Comparative premises in Poundbury with an extended lease were worth £275,000. The mid-range amount of ground rent was £65 invoiced per annum. The lease lapsed in 2094. Given that there were 68 years as a residual term we approximated the compensation to the freeholder to extend the lease to be within £13,300 and £15,400 not including fees.