Unfortunately that a Forest of Dean residential lease is a wasting asset. As the lease term reduces so does the value of the property. The extent of this is not fully appreciated in the early years due to the loss of value being disguised by increases in the Forest of Dean property market.Where your lease has approximately ninety years left, 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 falls under eighty years - otherwise a higher amount will be due. Most leasehold owners in Forest of Dean will be able to extend under the legislation; however a lawyer should be able to clarify if you qualify for an extension. In some situations you may not qualify. There are also strict timeframes and procedures to follow once the process has commenced and you will need to be guided by your conveyancing solicitor from beginning to end of the process.
Leasehold properties in Forest of Dean with in excess of one hundred years unexpired on the lease are often 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 upside in buying the freehold unless savings on ground rent and estate charges justify it.
| Lender | Requirement |
|---|---|
| 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. |
| Godiva Mortgages | 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
The conveyancing solicitors that we work with procure Forest of Dean 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 conveyancing solicitor we work with provide it.
Two years ago Alex, came perilously close to the 80-year mark with the lease on his purpose- built apartment in Forest of Dean. Having purchased his property two decades ago, the length of the lease was of minimal relevance. Luckily, he became aware that he needed to take steps soon on Extending the lease. Alex arranged for a lease extension at the eleventh hour last April. Alex and the freeholder eventually agreed on an amount of £5,000 . If the lease had dropped below eighty years, the premium would have become more costly by a minimum £950.
In 2014 we were contacted by Mrs Louise Cook who, having bought a one bedroom flat in Forest of Dean in January 2009. The question was if we could approximate the compensation to the landlord would likely be to prolong the lease by ninety years. Identical homes in Forest of Dean with an extended lease were valued around £183,600. The mid-range amount of ground rent was £65 collected every twelve months. The lease terminated in 2082. Given that there were 57 years unexpired we calculated the premium to the freeholder to extend the lease to be between £28,500 and £33,000 plus legals.
In 2013 we were called by Mr and Mrs. Y Dupont who, having owned a garden flat in Forest of Dean in September 1995. The question was if we could approximate the premium would likely be for a 90 year extension to my lease. Comparative residencies in Forest of Dean with a long lease were worth £250,000. The mid-range amount of ground rent was £50 billed yearly. The lease expired on 21 June 2093. Taking into account 68 years left we approximated the compensation to the freeholder for the lease extension to be within £10,500 and £12,000 not including costs.