There is no doubt about it a leasehold flat or house in Poundbury is a wasting asset as a result of the shortening lease. If the residual term has, over one hundred years to run then this decrease may be of little impact however there will become a point in time when a lease has fewer than eighty years unexpired as part of the premium you will incur is what is termed as a marriage value. This could increase sharply the cost. It is the main rational as to why you should extend the lease sooner than later. Most flat owners in Poundbury will meet the qualifying criteria; nevertheless a conveyancer can advise whether you qualify for a lease extension. In certain situations you may not qualify, the most frequent reason being that you have not been the owner of the property for two years.
It is generally accepted that a property with in excess of one hundred years remaining is worth roughly the same as a freehold. Where an additional 90 years added to any lease with more than 35 years remaining, the residence will be equivalent in value to a freehold for decades to come.
| 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. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 30 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 |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
The conveyancing solicitors that we work with procure Poundbury 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 conveyancing solicitor we work with provide it.
Henry was the the leasehold owner of a studio flat in Poundbury being sold with a lease of a few days over 59 years unexpired. Henry on an informal basis spoke with his freeholder a well known Manchester-based freehold company for a lease extension. The landlord indicated a willingness to extend the lease to 125 years subject to a new rent to start with set at £200 per annum and doubled every 25 years thereafter. Ordinarily, ground rent would not be due on a lease extension were Henry to invoke his statutory right. Henry procured expert advice and was able to make an informed judgement and deal with the matter and sell the flat.
Last Christmas we were phoned by Mr and Mrs. C Alexander , who took over the lease of a one bedroom apartment in Poundbury in March 2008. The dilemma was if we could shed any light on how much (roughly) compensation to the landlord would be to prolong the lease by a further 90 years. Similar premises in Poundbury with 100 year plus lease were worth £300,000. The mid-range ground rent payable was £50 invoiced annually. The lease elapsed on 14 April 2102. Considering the 76 years left we approximated the compensation to the landlord to extend the lease to be within £8,600 and £9,800 exclusive of legals.
In 2013 we were phoned by Dr Austin Jones who, having purchased a purpose-built flat in Poundbury in May 2007. We are asked if we could approximate the price would likely be for a ninety year lease extension. Identical homes in Poundbury with a long lease were valued about £257,800. The mid-range ground rent payable was £65 invoiced yearly. The lease came to a finish on 3 April 2091. Taking into account 65 years left we calculated the compensation to the landlord to extend the lease to be within £18,100 and £20,800 exclusive of costs.