Owning a apartment usually means owning a lease of the property, which has a finite term of years. The lease will normally be granted for a prescribed period of time , ordinarily 99 or 125 years, although we have seen longer and shorter terms in Bournemouth. Clearly, the length of lease left reduces over time. This is often overlooked and only raises itself as an issue when the flat or house has to be sold or refinanced. The shorter the lease the less it is worth and the more it will cost to extend the lease. Eligible long lease owners in Bournemouth have the right to extend the lease for an additional ninety years in accordance with the 1993 Leasehold Reform Act. Please give due deliberation before putting off your Bournemouth lease extension. Holding off the cost now likely increases the price you will ultimately incur for a lease extension
Leasehold residencies in Bournemouth with in excess of one hundred years left on the lease are sometimes regarded as a ‘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 freehold unless savings on ground rent and maintenance charges warrant it.
| Lender | Requirement |
|---|---|
| Accord Mortgages | 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. |
| 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. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 75 years plus the term of the mortgage at the outset of the mortgage. |
| 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 solicitors that we work with will always be prepared 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.
Half a year ago James, came perilously close to the 80-year mark with the lease on his leasehold apartment in Bournemouth. Having bought his home 19 years previously, the unexpired term was of no significance. As luck would have it, he became aware that he needed to take steps soon on a lease extension. James arranged for a lease extension just under the wire in June. James and the freeholder via the managing agents eventually agreed on an amount of £5,500 . If the lease had fallen below 80 years, the amount would have escalated by a minimum £1,125.
Mr and Mrs. E Lee was assigned a lease of a garden flat in Bournemouth in April 2008. The dilemma was if we could estimate the compensation to the landlord would be to prolong the lease by 90 years. Comparable properties in Bournemouth with 100 year plus lease were valued about £265,000. The mid-range ground rent payable was £50 collected per annum. The lease expired on 1 July 2099. Considering the 73 years unexpired we calculated the compensation to the landlord for the lease extension to be between £9,500 and £11,000 exclusive of legals.
In 2011 we were approached by Dr G Walker who, having took over the lease of a first floor flat in Bournemouth in April 2005. We are asked if we could estimate the price would be to prolong the lease by ninety years. Comparable premises in Bournemouth with an extended lease were valued about £264,000. The average ground rent payable was £60 collected per annum. The lease ran out on 27 September 2079. Considering the 53 years as a residual term we estimated the compensation to the freeholder for the lease extension to be between £37,100 and £42,800 plus expenses.