There is no doubt about it a leasehold flat or house in Poundbury is a wasting asset as a result of the diminishing lease term. Where the residual term has, beyond 99 years remaining then this decrease may be negligible nevertheless there will become a stage when a lease has less than 80 years unexpired as part of the premium you will incur is what is known as a marriage value. This could be significant. It is the main logic behind why you should consider extending without delay. The majority of flat owners in Poundbury will qualify for this right; however a conveyancer can confirm whether you are eligible to extend your lease. In limited situations you may not qualify, the most frequent reason being that you have owned the property for less than two years.
Leasehold premises in Poundbury with in excess of 100 years remaining 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 property. In such situations there is often little upside in buying the freehold unless savings on ground rent and maintenance charges warrant it.
| 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. |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| 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. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Lease extensions in Poundbury can be a difficult process. We recommend you procure guidance from a lawyer and valuer with experience in lease extensions.
We provide you with an expert from a selection of lease extension solicitors, which ensures a targeted and efficient service as you have a dedicated port of call with an individual lawyer. Our lease extension solicitors have a wealth of experience dealing with Poundbury lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
Gabriel owned a high value apartment in Poundbury being sold with a lease of a little over sixty years outstanding. Gabriel on an informal basis spoke with his landlord being a well known Manchester-based freehold company and enquired on a premium to extend the lease. The landlord was prepared to give an extension on non-statutory terms taking the lease to 125 years subject to a new rent initially set at £150 per annum and increase every 25 years thereafter. Ordinarily, ground rent would not be payable on a lease extension were Gabriel to invoke his statutory right. Gabriel procured expert advice and secured an acceptable deal informally and ending up with a market value flat.
In 2011 we were called by Mr Benjamin Petit who, having took over the lease of a studio flat in Poundbury in May 1998. The dilemma was if we could shed any light on how much (approximately) price would likely be to prolong the lease by ninety years. Identical residencies in Poundbury with 100 year plus lease were valued around £208,600. The average ground rent payable was £60 invoiced monthly. The lease expired in 2083. Having 57 years outstanding we approximated the compensation to the freeholder to extend the lease to be within £30,400 and £35,200 exclusive of legals.
Mr V Jones owned a garden apartment in Poundbury in June 2005. We are asked if we could shed any light on how much (roughly) compensation to the landlord would likely be for a ninety year extension to my lease. Identical properties in Poundbury with 100 year plus lease were worth £200,000. The average ground rent payable was £50 billed yearly. The lease expired on 2 October 2103. Having 77 years left we estimated the premium to the freeholder to extend the lease to be between £8,600 and £9,800 exclusive of legals.