Owning a flat usually means owning a lease of the property, which has a finite term of years. The lease will normally be granted for a prescribed period of time , ordinarily 99 or 125 years, although we have witnessed longer and shorter terms in Poundbury. Inevitably, the term of lease remaining shortens as time goes by. This is often ignored and only raises itself as an issue when the residence has to be disposed of or refinanced. The shorter the lease the lower the value of the property and the more expensive it will be to obtain a lease extension. Eligible long lease owners in Poundbury have the right to extend the lease for a further ninety years in accordance with Leasehold Reform legislation. Please give due attention before delaying your Poundbury lease extension. Holding off that expense now likely increases the price you will ultimately incur for a lease extension
Leasehold properties in Poundbury with in excess of 100 years outstanding 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 home. In such situations there is often little upside in buying the reversionary interest unless savings on ground rent and maintenance charges justify it.
| Lender | Requirement |
|---|---|
| Godiva Mortgages | 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. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
| 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. |
The lawyers 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.
Off the back of protracted negotiations with the freeholder of her studio apartment in Poundbury, Jodie commenced the lease extension process just as her lease was nearing the all-important 80-year threshold. The legal work was finalised in October 2010. The landlord’s fees were negotiated to approximately 600 pounds.
In 2010 we were approached by Ms Amelia Parker who, having was assigned a lease of a garden flat in Poundbury in May 2012. The question was if we could approximate the price would be for a 90 year extension to my lease. Comparative homes in Poundbury with 100 year plus lease were valued about £275,000. The mid-range ground rent payable was £45 billed per annum. The lease expiry date was in 2094. Having 69 years left we estimated the premium to the landlord to extend the lease to be within £12,400 and £14,200 plus professional charges.
Dr Hunter Bertrand took over the lease of a first floor apartment in Poundbury in October 2000. The question was if we could estimate the compensation to the landlord would likely be to prolong the lease by an additional years. Similar flats in Poundbury with an extended lease were valued around £216,000. The average amount of ground rent was £60 invoiced per annum. The lease terminated in 2083. Considering the 58 years as a residual term we calculated the compensation to the freeholder for the lease extension to be between £28,500 and £33,000 plus legals.