Poundbury leases on residential deteriorating in value. if your lease has approximately 90 years unexpired, you should start considering the need for a lease extension. If lease term is less than eighty years, you will then have to pay 50% of the property's 'marriage value' in addition to the usual cost of the lease extension to your landlord. Marriage value is the amount of additional value that a lease extension will add to the property. Flat owners in Poundbury will mostly be legally entitled to a lease extension; however It would be wise to check with a lawyer to confirm if you qualify. In certain circumstances you may not be entitled. There are also strict timetables and formalities to comply with once the process has commenced so it’s best to be guided by a lawyer during the process.
It is conventional wisdom that a residential leasehold with in excess of one hundred years unexpired lease term is worth roughly the equivalent as a freehold. Where an further ninety years added to all but the shortest lease, the property will be worth the same as a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| 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; |
| 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Irrespective of whether you are a tenant or a landlord in Poundbury,the lease extension lawyers 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 Poundbury valuers.
Liam owned a studio apartment in Poundbury being sold with a lease of just over 72 years left. Liam informally spoke with his freeholder a well known Bristol-based freehold company for a lease extension. The freeholder indicated a willingness to grant an extension taking the lease to 125 years on the basis of a rise in the rent to £200 per annum. Ordinarily, ground rent would not be due on a lease extension were Liam to invoke his statutory right. Liam procured expert advice and was able to make an informed decision and handle with the matter and sell the flat.
In 2010 we were e-mailed by Mr Lewis Fournier who, having acquired a recently refurbished apartment in Poundbury in March 2012. We are asked if we could estimate the price would be to prolong the lease by 90 years. Comparable homes in Poundbury with a long lease were in the region of £280,000. The mid-range ground rent payable was £45 collected monthly. The lease concluded in 2094. Given that there were 70 years remaining we approximated the premium to the freeholder for the lease extension to be within £12,400 and £14,200 exclusive of legals.
Mr and Mrs. Y García owned a one bedroom flat in Poundbury in June 2003. The question was if we could estimate the compensation to the landlord could be for a 90 year extension to my lease. Identical flats in Poundbury with a long lease were valued around £223,400. The mid-range amount of ground rent was £60 invoiced every twelve months. The lease elapsed in 2083. Given that there were 59 years remaining we approximated the compensation to the landlord for the lease extension to be within £27,600 and £31,800 plus legals.