With a long leasehold premises in Bournemouth, you are actually purchasing an entitlement to reside in a property for a prescribed time frame. Modern flat leases are usually granted for 99 years or 125. Many leasehold owners become complacent as this seems like a lengthy period of time, you should think about extending the lease sooner rather than later. The general rule is that the shorter the number of years is the cost of extending the lease increases markedly especially once there are fewer than 80 years remaining. Residents in Bournemouth with a lease drawing near to 81 years remaining should seriously think of extending it as soon as possible. When a lease has fewer than 80 years outstanding, under the relevant Act the freeholder is entitled to calculate and demand a larger premium, based on a technical calculation, known as “marriage value” which is due.
Leasehold residencies in Bournemouth with in excess of one hundred years remaining on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your premises. In such circumstances there is often little upside in purchasing the freehold unless savings on ground rent and maintenance charges justify 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; |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Coventry Building Society | 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. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Using our service gives you increased control over the value of your Bournemouth leasehold, as your property will be more valuable and saleable in respect of lease length should you decide to sell. The conveyancing solicitors that we work with have a in-depth market knowledge handling many hundreds of lease extensions or freehold purchase transactions.
Following lengthy negotiations with the landlord of her first floor flat in Bournemouth, Morgan started the lease extension process as the eighty year mark was quickly coming. The transaction completed in May 2011. The landlord’s costs were negotiated to under 450 GBP.
In 2014 we were approached by Mr and Mrs. T Garcia who, having acquired a studio flat in Bournemouth in September 2006. We are asked if we could shed any light on how much (roughly) premium would likely be to extend the lease by ninety years. Comparable flats in Bournemouth with 100 year plus lease were valued around £235,200. The mid-range amount of ground rent was £45 collected every twelve months. The lease concluded on 9 March 2091. Having 66 years remaining we calculated the premium to the freeholder to extend the lease to be between £12,400 and £14,200 not including expenses.
In 2010 we were called by Mr and Mrs. M Cox who, having moved into a ground floor apartment in Bournemouth in October 2001. We are asked if we could approximate the price could be to extend the lease by ninety years. Identical premises in Bournemouth with 100 year plus lease were in the region of £280,000. The average ground rent payable was £55 collected every twelve months. The lease lapsed in 2102. Considering the 77 years as a residual term we approximated the premium to the freeholder for the lease extension to be within £13,300 and £15,400 plus costs.