With a long leasehold premises in Poundbury, you are in fact renting it for a certain period of time. Modern flat leases typically tend to be for 99 years or 125. Many leasehold owners become complacent as this seems like a long period of time, you should consider a lease extension sooner as opposed to later. Accepted thinking is that the shorter the lease is the cost of extending the lease gets disproportionately greater particularly when there are fewer than eighty years left. Residents in Poundbury with a lease approaching 81 years unexpired should seriously think of extending it sooner as opposed to later. When a lease has under 80 years outstanding, under the current statute the landlord is entitled to calculate and demand a larger premium, assessed on a technical calculation, known as “marriage value” which is due.
It is conventional wisdom that a property with more than one hundred years remaining is worth roughly the same as a freehold. Where an further ninety years added to any lease with more than 30 years unexpired, the premises will be equivalent in value to a freehold for many years in the future.
| 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. |
| 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
The conveyancers 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 lawyer we work with provide it.
In the wake of 6 months of lengthy negotiations with the freeholder of her leasehold flat in Poundbury, Rachael started the lease extension process as the 80 year threshold was fast advancing. The transaction completed in March 2014. The freeholder’s costs were kept to an absolute minimum.
Dr Ella Sánchez bought a purpose-built apartment in Poundbury in April 2007. We are asked if we could approximate the compensation to the landlord would likely be to prolong the lease by ninety years. Similar homes in Poundbury with a long lease were worth £257,800. The average ground rent payable was £65 billed annually. The lease expiry date was on 23 May 2090. Taking into account 65 years outstanding we estimated the premium to the landlord for the lease extension to be between £18,100 and £20,800 exclusive of legals.
Last Summer we were approach by Dr N Lambert , who was assigned a lease of a newly refurbished apartment in Poundbury in March 2012. The question was if we could approximate the premium would be for a 90 year lease extension. Similar properties in Poundbury with a long lease were worth £191,400. The average amount of ground rent was £55 billed annually. The lease ran out in 2079. Having 54 years as a residual term we calculated the compensation to the freeholder to extend the lease to be between £34,200 and £39,600 plus costs.