For those whose Bourne End home is held on a long lease, our message is clear – if you do nothing, your property will eventually revert to the freeholder, leaving you empty-handed. The shorter the lease the less it is worth and the more it will cost to extend the lease.
Leasehold properties in Bourne End with in excess of one hundred years unexpired on the lease are sometimes referred to as ‘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 purchasing the freehold unless savings on ground rent and estate charges justify it.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Leeds Building Society | 85 years remaining from the start 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. |
| 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 |
| Yorkshire 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. |
The lawyers that we work with handle Bourne End 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 lawyer we work with provide it.
Luke was the the leasehold owner of a 2 bedroom apartment in Bourne End on the market with a lease of a few days over 61 years left. Luke on an informal basis spoke with his landlord being a well known local-based freehold company for a lease extension. The landlord was prepared to give an extension on non-statutory terms taking the lease to 125 years on the basis of a new rent to start with set at £100 per annum and increase every 25 years thereafter. Ordinarily, ground rent would not be payable on a lease extension were Luke to exercise his statutory right. Luke obtained expert advice and was able to make an informed decision and deal with the matter and ending up with a market value flat.
In 2009 we were approached by Dr Rebecca Morris who, having completed a one bedroom apartment in Bourne End in August 2006. The dilemma was if we could estimate the compensation to the landlord would likely be for a ninety year lease extension. Comparable homes in Bourne End with a long lease were valued around £210,600. The mid-range ground rent payable was £45 collected annually. The lease finished in 2086. Having 62 years left we estimated the compensation to the freeholder to extend the lease to be within £18,100 and £20,800 exclusive of fees.
In 2011 we were e-mailed by Mr and Mrs. F Wright who, having acquired a purpose-built apartment in Bourne End in July 2011. The question was if we could shed any light on how much (roughly) compensation to the landlord could be for a ninety year extension to my lease. Identical homes in Bourne End with 100 year plus lease were worth £260,000. The average amount of ground rent was £50 billed quarterly. The lease expiry date was on 15 May 2097. Given that there were 73 years remaining we estimated the premium to the landlord to extend the lease to be within £9,500 and £11,000 plus costs.