The market value of a leasehold property in Forest Row depends on how many years the lease has remaining. If it is close to or fewer than eighty years you should foresee problems on re-sale, so it is advisable to arrange for the lease to be extended ahead of buying. It is ideal to start the process of extending the lease is when a lease still has 82 years remaining so that formalities can be finalised well before the 80 year cut off point. Leasehold Reform legislation enables Forest Row qualifying lessees to an additional term of ninety years over and above the existing term, at a peppercorn rent (zero ground rent). The intention of the valuation is to determine the premium payable by the lessee to the freeholder for the acquisition of the lease extension.
Leasehold residencies in Forest Row with over 100 years outstanding on the lease are often referred to as ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your home. In such situations there is often little upside in purchasing the reversionary interest unless savings on ground rent and service charges warrant it.
| Lender | Requirement |
|---|---|
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| Lloyds TSB Scotland | Minimum 70 years from the date 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. |
| 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 conveyancing solicitors that we work with undertake Forest Row 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.
Following protracted negotiations with the freeholder of her garden apartment in Forest Row, Ellen started the lease extension process as the 80 year mark was swiftly nearing. The lease extension was finalised in November 2010. The landlord’s fees were kept to an absolute minimum.
Last Autumn we were phoned by Mr and Mrs. I Wright , who owned a first floor apartment in Forest Row in July 2010. We are asked if we could estimate the compensation to the landlord would likely be to prolong the lease by an additional years. Similar properties in Forest Row with an extended lease were worth £290,000. The mid-range amount of ground rent was £45 billed every twelve months. The lease ran out on 22 June 2099. Having 73 years remaining we calculated the premium to the freeholder for the lease extension to be between £9,500 and £11,000 plus costs.
In 2013 we were approached by Mr and Mrs. G James who, having completed a purpose-built apartment in Forest Row in May 2001. We are asked if we could shed any light on how much (roughly) premium would likely be for a 90 year extension to my lease. Identical properties in Forest Row with an extended lease were valued around £240,600. The average ground rent payable was £65 billed monthly. The lease ended on 17 March 2088. Considering the 62 years left we calculated the premium to the landlord for the lease extension to be between £21,900 and £25,200 exclusive of expenses.