Unfortunately that a Bournemouth residential lease is a wasting asset. As the lease term reduces so does the value of the property. The extent of this is taken for granted in the early years due to the loss of value being disguised by increases in the Bournemouth property market.Where your lease has approximately ninety years left, you need to start thinking about a lease extension. An important point to note is that it is desirable for lease extension to take place before the term of the existing lease slips below 80 years - otherwise a higher amount will be payable. The majority of flat owners in Bournemouth will be able to extend under the legislation; however a conveyancing solicitor will be able to clarify if you are eligibility. In some situations you may not be entitled. There are also strict timeframes and procedures to be adhered to once the process has commenced and you will need to be guided by your conveyancing solicitor throughout the process.
Leasehold properties in Bournemouth with more than 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 property. In such situations there is often little upside in purchasing the freehold unless savings on ground rent and service charges justify it.
| Lender | Requirement |
|---|---|
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| 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. |
| 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. |
| Santander | You must report the unexpired lease term to us and await our instructions if: 1. the unexpired term assumed by our valuer is between 55 and 82 years, but the actual unexpired term differs by more than one year (whether longer or shorter); or 2. the unexpired term assumed by our valuer is more than 82 years but the actual unexpired term is less than 82 years; or 3. no valuation report is provided However, we will not accept a lease where on expiry of the mortgage: (i) less than 50 years remain and all or part of the loan is repaid on an interest-only basis: or (ii) less than 30 years remain and the loan is repaid on a capital and interest basis We will accept a lease that has been extended under the provisions of the Leasehold Reform Act 1993 provided statutory compensation would be available to the leaseholder. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
Irrespective of whether you are a tenant or a freeholder in Bournemouth,the lease extension lawyers that we work with will always be willing to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Bournemouth valuers.
Trailing lengthy negotiations with the landlord of her purpose-built apartment in Bournemouth, Megan commenced the lease extension process just as the lease was approaching the crucial 80-year mark. The transaction was concluded in November 2013. The freeholder’s fees were kept to an absolute minimum.
Last Winter we were phoned by Dr Gemma Bennett , who took over the lease of a ground floor apartment in Bournemouth in February 2003. The question was if we could estimate the price would be to extend the lease by ninety years. Identical premises in Bournemouth with a long lease were worth £242,600. The mid-range amount of ground rent was £45 invoiced yearly. The lease terminated in 2092. Given that there were 67 years unexpired we estimated the premium to the freeholder for the lease extension to be within £11,400 and £13,200 not including professional charges.
Last year we were called by Mr John Bailey , who bought a one bedroom apartment in Bournemouth in June 2008. We are asked if we could approximate the premium would likely be to prolong the lease by a further 90 years. Similar premises in Bournemouth with a long lease were in the region of £280,000. The mid-range ground rent payable was £55 collected quarterly. The lease finished on 23 June 2103. Taking into account 78 years remaining we estimated the compensation to the landlord to extend the lease to be between £13,300 and £15,400 plus legals.