For those whose Poundbury home is held on a long lease, the message is clear – if you do nothing, your property will ultimately revert to your landlord, leaving you empty-handed. The shorter the lease the less it is worth and the more it will cost to extend the lease.
It is generally accepted that a property with more than one hundred years remaining is worth approximately the same as a freehold. Where an additional ninety years added to all but the shortest lease, the property will be worth the same as a freehold for decades to come.
| 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. |
| Leeds Building Society | 85 years remaining from the start 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. |
Retaining our service will provide you increased control over the value of your Poundbury leasehold, as your property will be more valuable and marketable in terms of lease length should you decide to sell. The conveyancing solicitors that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
In the wake of 9 months of lengthy negotiations with the freeholder of her leasehold flat in Poundbury, Millie initiated the lease extension process just as the lease was coming close to the critical 80-year deadline. The transaction was concluded in January 2012. The freeholder’s costs were kept to an absolute minimum.
In 2013 we were phoned by Mr and Mrs. M Martin who, having acquired a basement apartment in Poundbury in March 2010. We are asked if we could shed any light on how much (roughly) price would be to extend the lease by 90 years. Similar flats in Poundbury with 100 year plus lease were valued about £290,000. The mid-range ground rent payable was £45 collected yearly. The lease ran out on 17 August 2098. Considering the 73 years outstanding we estimated the premium to the landlord to extend the lease to be within £9,500 and £11,000 exclusive of costs.
In 2014 we were e-mailed by Dr P Morgan who, having acquired a purpose-built apartment in Poundbury in June 2005. The dilemma was if we could shed any light on how much (approximately) price would likely be for a 90 year extension to my lease. Identical premises in Poundbury with a long lease were valued around £240,600. The average ground rent payable was £60 collected per annum. The lease elapsed on 2 August 2087. Having 62 years as a residual term we approximated the premium to the landlord for the lease extension to be within £21,900 and £25,200 plus costs.