Poole leases on residential properties are gradually losing value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of your lease becomes more expensive. The majority of owners of residential leasehold property in Poole enjoy rights under legislation to extend the terms of their leases. Where you are a leasehold owner in Poole you would be well advised to see if your lease has between seventy and ninety years left. There are good reasons why a Poole leaseholder with a lease having around eighty years remaining should take steps to ensure that a lease extension is actioned without delay
Leasehold premises in Poole with over 100 years unexpired on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your property. In such situations there is often little to be gained by purchasing the freehold unless savings on ground rent and maintenance charges merit it.
| 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; |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| 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. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Irrespective of whether you are a tenant or a freeholder in Poole,the lease extension solicitors that we work with will always be happy to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Poole valuers.
Half a year ago Isaac, started to get near to the eighty-year threshold with the lease on his studio flat in Poole. In buying his home twenty years previously, the unexpired term was of no bearing. Luckily, he recognised he needed to take steps soon on a lease extension. Isaac extended the lease just under the wire last April. Isaac and the landlord who owned the flat above in the end agreed on an amount of £6,000 . If the lease had slipped below 80 years, the premium would have gone up by a minimum £1,000.
Last Summer we were called by Mr and Mrs. S Parker , who completed a garden flat in Poole in September 2008. The dilemma was if we could estimate the compensation to the landlord would be for a 90 year lease extension. Identical properties in Poole with 100 year plus lease were valued around £255,000. The mid-range amount of ground rent was £50 invoiced per annum. The lease ran out on 12 June 2094. Taking into account 70 years outstanding we calculated the compensation to the landlord for the lease extension to be between £10,500 and £12,000 exclusive of fees.
In 2009 we were called by Dr Zoe Thomas who, having was assigned a lease of a recently refurbished apartment in Poole in February 2007. We are asked if we could estimate the premium could be to prolong the lease by 90 years. Comparable flats in Poole with a long lease were in the region of £246,800. The average ground rent payable was £60 invoiced every twelve months. The lease termination date was on 11 May 2074. Considering the 50 years left we calculated the compensation to the landlord to extend the lease to be between £44,700 and £51,600 exclusive of professional charges.