Boscombe leases on residential properties are gradually losing value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of the lease gets more expensive. It is the case that most Boscombe tenants have the right to extend their lease by an additional ninety years under the 1993 Leasehold Reform Act. Where you are a leasehold owner in Boscombe you really ought to check if your lease has between seventy and ninety years left. In particular once the remaining lease term slips under eighty years, the amount payable for any lease extension sharply increases as part of the premium you pay is what is known as a marriage value
Leasehold properties in Boscombe with in excess of 100 years remaining on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your property. In such circumstances there is often little to be gained by buying the reversionary interest unless savings on ground rent and service charges merit it.
| 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; |
| 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. |
| 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. |
| 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. |
Retaining our service will provide you better control over the value of your Boscombe leasehold, as your property will be more valuable and saleable in respect of lease length should you want to sell. The lawyers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
During the course of the last few months Luca, started to get close to the 80-year threshold with the lease on his basement apartment in Boscombe. Having purchased his property two decades ago, the lease term was of little interest. Thankfully, he realised he would soon be paying an inflated amount for a lease extension. Luca extended the lease just under the wire last September. Luca and the landlord who owned the flat above subsequently agreed on a premium of £5,500 . If the lease had dipped lower than 80 years, the amount would have escalated by at least £1,000.
In 2014 we were phoned by Dr Liam Norbert who, having moved into a first floor flat in Boscombe in January 2000. We are asked if we could shed any light on how much (roughly) price would likely be to extend the lease by ninety years. Comparable flats in Boscombe with 100 year plus lease were valued around £261,600. The average amount of ground rent was £60 invoiced annually. The lease finished in 2077. Given that there were 52 years remaining we estimated the premium to the freeholder for the lease extension to be between £39,000 and £45,000 not including expenses.
Last Winter we were called by Mr and Mrs. I Rogers , who acquired a one bedroom flat in Boscombe in May 1998. We are asked if we could shed any light on how much (roughly) premium would likely be to prolong the lease by ninety years. Comparable residencies in Boscombe with 100 year plus lease were worth £218,000. The mid-range ground rent payable was £45 invoiced annually. The lease expired on 10 July 2088. Having 63 years remaining we calculated the compensation to the freeholder for the lease extension to be within £17,100 and £19,800 not including expenses.