The market value of a leasehold property in Bournemouth depends on how long the lease has left to run. If it is near to or less than 80 years you should foresee difficulties on re-sale, so it is recommended to arrange for a lease extension prior to buying. It is preferable to commence the lease extension process when the lease still has 82 years remaining so that formalities can be finalised ahead of the 80 year cut off point. Current legislation enables Bournemouth qualifying lessees to an additional term of 90 years on top of the unexpired term, at a notional rent (zero ground rent). 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.
It is conventional wisdom that a property with in excess of 100 years unexpired lease term is worth roughly the equivalent as a freehold. Where an additional ninety years added to all but the shortest lease, the premises will be worth the same as a freehold for decades to come.
| Lender | Requirement |
|---|---|
| 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. |
| 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. |
| Santander | If the property is leasehold, the remaining unexpired lease term at the end of the new mortgage term must be at least 50 years where any part of the mortgage is on Interest Only and 30 years if all loan parts are on Capital Repayment and Interest. You must report the unexpired lease term to us and await our instructions if:
|
| Skipton Building Society | 85 years from the date of completion of the mortgage For Buy to Let cases: - lettings must not breach any of the lessee’s covenants; and - consent of the lessor to lettings must be obtained if necessary |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
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 conveyancer we work with provide it.
Trailing unsuccessful negotiations with the landlord of her purpose-built flat in Bournemouth, Rhiannon started the lease extension process just as the lease was approaching the crucial eighty-year deadline. The transaction was concluded in April 2015. The landlord’s costs were kept to an absolute minimum.
In 2012 we were phoned by Mr Charlie Young who, having owned a ground floor apartment in Bournemouth in September 2006. The question was if we could estimate the compensation to the landlord could be for a ninety year lease extension. Comparable residencies in Bournemouth with an extended lease were worth £270,000. The mid-range amount of ground rent was £55 billed per annum. The lease came to a finish in 2101. Taking into account 75 years unexpired we calculated the compensation to the freeholder to extend the lease to be within £9,500 and £11,000 plus fees.
Dr Isaac Cook acquired a basement apartment in Bournemouth in February 1998. We are asked if we could shed any light on how much (roughly) premium would be to extend the lease by an additional years. Comparable properties in Bournemouth with 100 year plus lease were in the region of £173,800. The mid-range ground rent payable was £60 collected annually. The lease concluded on 24 May 2081. Considering the 55 years left we calculated the compensation to the freeholder for the lease extension to be between £31,400 and £36,200 plus costs.