There is no doubt about it a leasehold flat or house in Bournemouth is a wasting asset as a result of the diminishing lease term. If the lease has, beyond one hundred years to run then this decrease may be fractional nevertheless there will become a point in time when a lease has less than eighty years remaining as part of the premium you will incur is what is known as a marriage value. This could be significant. It is the primary rational as to why you should consider extending sooner than later. The majority of flat owners in Bournemouth will qualify for this right; nevertheless a lawyer will be able to advise if you are eligible for a lease extension. In limited situations you may not qualify, the most frequent reason being that you have not been the owner of the property for two years.
It is conventional wisdom that a residential leasehold with in excess of 100 years remaining is worth roughly the same as a freehold. Where an further 90 years added to all but the shortest lease, the residence will be equivalent in value to a freehold for many years in the future.
| 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. |
| National Westminster Bank | Mortgage term plus 30 years. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
The conveyancers that we work with undertake Bournemouth lease extensions and help protect your position. A lease extension can be arranged to be completed to coincide with a change of ownership so the costs of the lease extension are paid for using part of the sale proceeds. You really do need expert legal advice in this difficult and technical area of law. The conveyancing solicitor we work with provide it.
Half a year ago Matthew, came perilously near to the 80-year mark with the lease on his first floor flat in Bournemouth. In buying his property two decades ago, the lease term was of minimal bearing. As luck would have it, he became aware that he needed to take steps soon on Extending the lease. Matthew arranged for a lease extension just ahead of time in July. Matthew and the freeholder via the managing agents subsequently agreed on the final figure of £6,000 . If he not met the deadline, the price would have become more exhorbitant by at least £975.
Dr Ollie François purchased a newly refurbished flat in Bournemouth in February 2009. The question was if we could approximate the premium would likely be for a 90 year lease extension. Comparable properties in Bournemouth with an extended lease were valued about £220,400. The mid-range amount of ground rent was £45 billed yearly. The lease finished in 2088. Considering the 64 years outstanding we approximated the premium to the freeholder to extend the lease to be within £15,200 and £17,600 exclusive of expenses.
In 2010 we were phoned by Mr and Mrs. W Martin who, having was assigned a lease of a studio flat in Bournemouth in September 2005. The question was if we could approximate the compensation to the landlord could be for a ninety year extension to my lease. Similar residencies in Bournemouth with an extended lease were valued around £270,000. The mid-range ground rent payable was £55 collected per annum. The lease concluded on 4 May 2099. Given that there were 75 years left we calculated the premium to the landlord for the lease extension to be between £9,500 and £11,000 not including fees.