Unfortunately that a Forest of Dean residential lease is a wasting asset. The lease value drops in proportion to its lease length. The extent of this is not fully appreciated in the first few years due to the reduction being disguised by increases in the Forest of Dean property prices.Once your lease nears 85ish years, you should start considering a lease extension. If lease term falls below eighty years, you will end up paying half of the property's 'marriage value' in addition to the usual cost of the lease extension to the landlord. Marriage value is the amount of additional value that a lease extension will add the property The majority of leasehold owners in Forest of Dean will be able to extend under the legislation; however a lawyer will be able to clarify if you are eligibility. In some situations you may not be entitled. There are also strict timetables and procedures to be adhered to once the process has commenced and you will need to be guided by your conveyancing solicitor from beginning to end of the process.
It is conventional wisdom that a residential leasehold with over 100 years remaining is worth roughly the equivalent as a freehold. Where an further 90 years added to all but the shortest lease, the premises will be worth the same as a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage should be declined (see exception below). Leases with greater than 70 years but fewer than 85 years remaining must be referred to issuing office. Leases with fewer than 70 years should only be referred to the issuing office where the following scenario applies, as discretion may be applied subject to bank approval: • Property is located in any of the following prestigious developments: Cadogan, Crown, Grosvenor, Howard de Walden, Portman or Wellcome Trust Estates in Central London AND • The value of the property subject to the short remaining term is £500,000 or more AND • The loan to value does not exceed 90% for purchases, 90% like for like re-mortgages, 80% for re-mortgages with any element of capital raising and 80% for existing Barclays mortgage borrowers applying for additional borrowing; |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| 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 |
The lawyers that we work with undertake 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 John, came critically close to the 80-year threshold with the lease on his one bedroom flat in Forest of Dean. Having bought his flat twenty years ago, the unexpired term was of minimal relevance. As luck would have it, he realised he would imminently be paying an inflated amount for a lease extension. John extended the lease at the eleventh hour last September. John and the landlord who owned the flat above in the end settled on the final figure of £5,500 . If the lease had slipped to less than 80 years, the sum would have escalated by at least £975.
In 2014 we were called by Mr and Mrs. Y Díaz who, having moved into a basement apartment in Forest of Dean in January 1996. The dilemma was if we could estimate the compensation to the landlord would be to extend the lease by an additional years. Comparative properties in Forest of Dean with a long lease were valued around £183,600. The average amount of ground rent was £65 invoiced monthly. The lease ran out in 2081. Taking into account 57 years remaining we approximated the compensation to the freeholder to extend the lease to be between £28,500 and £33,000 not including fees.
Last February we were e-mailed by Mr M Moore , who moved into a first floor apartment in Forest of Dean in October 2009. We are asked if we could estimate the compensation to the landlord could be for a ninety year lease extension. Comparative premises in Forest of Dean with 100 year plus lease were valued around £245,000. The average amount of ground rent was £45 invoiced quarterly. The lease finished on 15 May 2092. Taking into account 68 years as a residual term we calculated the compensation to the landlord to extend the lease to be between £9,500 and £11,000 not including expenses.