The re-sale value of a leasehold property in Bournemouth depends on how long the lease has remaining. If it is near to or fewer than 80 years you should expect problems on re-sale, so it is advisable to arrange for the lease to be extended ahead of purchasing. Ideally one should start the lease extension process when a lease still has 82 years unexpired so that formalities can be concluded ahead of the eighty year cut off point. Statute enables Bournemouth qualifying lessees to obtain a lease extension of 90 years on top of the remaining length of the lease at a peppercorn rent (that is, rent free). The intention of the valuation is to arrive at an opinion of the sum payable by the lessee to the freeholder for the purchase of the lease extension.
Leasehold properties in Bournemouth with over 100 years unexpired 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 situations there is often little to be gained by buying the reversionary interest unless savings on ground rent and estate charges justify it.
| Lender | Requirement |
|---|---|
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
The conveyancing solicitors that we work with procure 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.
Trailing lengthy negotiations with the landlord of her first floor flat in Bournemouth, Paige initiated the lease extension process just as the lease was approaching the crucial 80-year threshold. The legal work was finalised in May 2007. The freeholder’s costs were restricted to below 650 GBP.
Mr and Mrs. M Anderson took over the lease of a studio apartment in Bournemouth in March 2010. The dilemma was if we could approximate the premium would be for a ninety year lease extension. Comparative premises in Bournemouth with a long lease were valued about £191,000. The mid-range ground rent payable was £65 billed annually. The lease terminated in 2083. Given that there were 58 years remaining we calculated the premium to the landlord for the lease extension to be within £23,800 and £27,400 exclusive of professional charges.
Mrs F Harris took over the lease of a one bedroom flat in Bournemouth in July 2009. We are asked if we could estimate the compensation to the landlord could be for a 90 year lease extension. Similar homes in Bournemouth with 100 year plus lease were worth £250,000. The mid-range amount of ground rent was £50 invoiced annually. The lease terminated on 12 June 2094. Having 69 years remaining we approximated the premium to the landlord to extend the lease to be between £9,500 and £11,000 not including professional charges.