Owning a apartment usually means owning a lease of the property, this is a ‘time-limited’ interest becoming shorter every day. This lease will usually be granted for a prescribed period of time , ordinarily 99 or 125 years, although we have seen longer and shorter terms in Poole. Inevitably, the length of lease remaining shortens over time. This may slip by relatively unnoticed when the residence has to be disposed of or refinanced. The shorter the lease the lower the value of the property and the more it will cost to procure a lease extension. Qualifying leaseholders in Poole have the right to extend the lease for a further ninety years under statute. You should give due attention before delaying your Poole lease extension. Putting off that expense now only increases the price you will ultimately incur for a lease extension
Leasehold premises in Poole with over 100 years left on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your premises. In such circumstances there is often little to be gained by purchasing the freehold unless savings on ground rent and estate charges warrant 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; |
| 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. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must also be not less than 75 years at the outset 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. |
Irrespective of whether you are a tenant or a freeholder in Poole,the lease extension experts that we work with will always be happy to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with Poole valuers.
Half a year ago Owen, started to get close to the 80-year threshold with the lease on his basement flat in Poole. Having purchased his home twenty years previously, the lease term was of minimal interest. Fortunately, he became aware that he would soon be paying an escalated premium for a lease extension. Owen extended the lease just under the wire last June. Owen and the freeholder via the management company eventually agreed on the final figure of £5,500 . If he not met the deadline, the amount would have increased by at least £900.
Last month we were e-mailed by Mr and Mrs. L Hall , who took over the lease of a one bedroom apartment in Poole in November 2000. We are asked if we could estimate the compensation to the landlord would be for a 90 year extension to my lease. Comparable homes in Poole with a long lease were worth £193,400. The average ground rent payable was £65 billed monthly. The lease lapsed in 2085. Given that there were 59 years as a residual term we estimated the compensation to the freeholder to extend the lease to be between £21,900 and £25,200 exclusive of legals.
Dr H Rose acquired a basement flat in Poole in January 1995. We are asked if we could approximate the compensation to the landlord would likely be for a ninety year lease extension. Comparative properties in Poole with an extended lease were worth £255,000. The average amount of ground rent was £50 billed per annum. The lease terminated on 13 July 2096. Taking into account 70 years as a residual term we approximated the premium to the freeholder for the lease extension to be between £9,500 and £11,000 exclusive of professional charges.