For anyone whose Bourne home is held on a long lease, the message is clear – if no remedial action is taken, your property will ultimately revert to your landlord, leaving you empty-handed. The shorter the lease the less it is worth and the more expensive it will be to extend the lease.
Leasehold premises in Bourne with more than 100 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 property. In such situations there is often little to be gained by purchasing the reversionary interest unless savings on ground rent and estate 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. |
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| 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. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
Retaining our service will provide you enhanced control over the value of your Bourne leasehold, as your property will be more valuable and saleable in terms of lease length should you wish to sell. The lawyers that we work with have a wealth of experience of handling many hundreds of lease extensions or freehold purchase transactions.
Aarav owned a high value apartment in Bourne being sold with a lease of a little over sixty years unexpired. Aarav informally spoke with his freeholder being a well known Manchester-based freehold company for a lease extension. The freeholder indicated a willingness to extend the lease to 125 years on the basis of an increased rent to £50 annually. Ordinarily, ground rent would not be payable on a lease extension were Aarav to invoke his statutory right. Aarav obtained expert advice and secured an acceptable deal informally and sell the flat.
Last month we were phoned by Dr Rachael Brooks , who moved into a recently refurbished flat in Bourne in November 2008. The question was if we could estimate the price would be to prolong the lease by ninety years. Identical homes in Bourne with an extended lease were in the region of £166,800. The mid-range ground rent payable was £50 billed yearly. The lease concluded on 22 April 2075. Taking into account 50 years left we calculated the premium to the landlord for the lease extension to be within £32,300 and £37,400 plus expenses.
Dr Archie Wilson moved into a garden flat in Bourne in February 2009. The dilemma was if we could estimate the compensation to the landlord could be for a ninety year extension to my lease. Similar residencies in Bourne with an extended lease were worth £280,000. The average amount of ground rent was £45 collected yearly. The lease expired on 16 August 2095. Considering the 70 years remaining we estimated the premium to the freeholder to extend the lease to be between £12,400 and £14,200 exclusive of costs.