It’s a harsh certainty that a Bournemouth residential lease is a wasting asset. The lease value drops in proportion to its lease length. The extent of this is not fully appreciated in the early years due to the loss of value being disguised by increases in the Bournemouth property prices.Once your lease gets to 85ish years, you should 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 lower than 80 years - otherwise a higher amount will be due. Most leasehold owners in Bournemouth will be able to extend under the legislation; however a conveyancing solicitor will be able to confirm if you are eligibility. In some cases you may not qualify. 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 for the duration of the process.
Leasehold properties in Bournemouth with more than 100 years unexpired 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 home. In such circumstances there is often little upside in buying the reversionary interest unless savings on ground rent and service charges justify 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. |
| 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 | 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. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Retaining our service will provide you better control over the value of your Bournemouth leasehold, as your property will be more valuable and marketable in terms of lease length should you wish to sell. The conveyancers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
After lengthy correspondence with the landlord of her two bedroom apartment in Bournemouth, Amelia initiated the lease extension process as the eighty year deadline was fast approaching. The lease extension was finalised in April 2014. The freeholder’s costs were kept to an absolute minimum.
In 2011 we were called by Dr Georgina Martin who, having bought a newly refurbished flat in Bournemouth in October 2008. We are asked if we could shed any light on how much (approximately) premium could be for a ninety year extension to my lease. Identical flats in Bournemouth with an extended lease were in the region of £264,000. The average ground rent payable was £60 invoiced annually. The lease lapsed in 2078. Taking into account 53 years unexpired we calculated the compensation to the landlord to extend the lease to be between £37,100 and £42,800 exclusive of fees.
Mrs Morgan Rivera bought a ground floor flat in Bournemouth in January 2011. The dilemma was if we could shed any light on how much (roughly) premium would be for a ninety year lease extension. Identical premises in Bournemouth with a long lease were in the region of £218,000. The mid-range ground rent payable was £45 invoiced quarterly. The lease expired on 18 May 2088. Having 63 years outstanding we approximated the compensation to the freeholder to extend the lease to be within £17,100 and £19,800 exclusive of legals.