The market value of Forest of Dean leasehold residential property falls as the lease term becomes shorter and this will have an impact on its saleability. The expense of a lease extension can escalate materialy once the remaining term is less than eighty years
Leasehold premises in Forest of Dean with more than 100 years outstanding 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 property. In such situations there is often little upside in buying the reversionary interest unless savings on ground rent and service charges warrant it.
| Lender | Requirement |
|---|---|
| Birmingham Midshires | 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
Engaging our service will provide you enhanced control over the value of your Forest of Dean leasehold, as your property will be more valuable and marketable in relation to the lease length should you decide to sell. The lawyers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Trailing lengthy correspondence with the landlord of her garden apartment in Forest of Dean, Bethan started the lease extension process just as the lease was coming close to the crucial eighty-year mark. The legal work was finalised in January 2011. The landlord’s fees were kept to an absolute minimum.
Last year we were called by Dr J Kelly , who owned a recently refurbished flat in Forest of Dean in March 2006. We are asked if we could approximate the compensation to the landlord could be to extend the lease by 90 years. Identical homes in Forest of Dean with an extended lease were in the region of £237,600. The average amount of ground rent was £45 collected annually. The lease concluded in 2092. Given that there were 67 years remaining we approximated the premium to the freeholder for the lease extension to be between £11,400 and £13,200 plus costs.
In 2010 we were phoned by Dr C Khan who, having took over the lease of a first floor flat in Forest of Dean in November 2012. The question was if we could estimate the price would be for a 90 year extension to my lease. Similar premises in Forest of Dean with an extended lease were in the region of £280,000. The average ground rent payable was £55 billed per annum. The lease finished in 2102. Given that there were 77 years left we calculated the premium to the freeholder to extend the lease to be between £13,300 and £15,400 not including costs.