Tilehurst Lease Extension - Free Consultation

Before you progress with your lease extension in Tilehurst
Get a quote from one of our lease extension experts with over 20 years experience.

Let them guide you for FREE on the various options available to you.

It may end up saving you thousands.

Why you should start your Tilehurst lease extension


Main reasons to start your Tilehurst lease extension today:

Increase your lease and increase your Tilehurst property value

Tilehurst leases on residential properties are gradually decreasing in value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of your lease becomes more expensive. Legislation has been in place for sometime now allowing qualifying Tilehurst residential leaseholders to extend the terms of long leases. Where you are a leasehold owner in Tilehurst you really ought to investigate if your lease has between seventy and 90 years left. There are good reasons why a Tilehurst leaseholder with a lease having around 80 years remaining should take action to make sure that a lease extension is put in place without delay

An extended lease has roughly the same value as a freehold

Leasehold properties in Tilehurst with more than 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 home. In such circumstances there is often little to be gained by buying the reversionary interest unless savings on ground rent and maintenance charges justify it.

Mortgage lenders may decide not to issue a mortgage on a short lease

The trend since the credit crunch has been for banks to tighten lending criteria across the board - this has extended to the types of security over which the home loan is to be granted. This has resulted in the unexpired lease term required by lenders has increased. In the past mortgage companies would lend on a lease with 25 years plus the term of the loan - routinely 50 year leases but those requirements are being increasingly undermined by the requirement for lengthy leases - many use a minimum term of 75 years as a prerequisite.

Lender Requirement
Bank of Scotland 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 Mortgage Works Minimum unexpired lease term is 70 years with 30 years remaining at the end of the mortgage term.
Where the unexpired lease term is different to that recorded on the mortgage offer, the following clarifies if we need to be informed:

Second hand property:
- If the unexpired lease term on the offer is 85 years or more - only advise us if the actual lease term is less than 85 years
- if the unexpired lease term on the offer is less than 85 years – advise us if the actual lease term is different than reported
- For equity share applications - advise us if the actual lease term is different than reported on the offer

New build property:
- If the unexpired lease term stated on the offer is 125 years (flat) / 250 years (house) or more - only advise us if the actual lease term is less than 125 years (flat) / 250 years (house)
- For equity share applications - always advise us if the actual lease term is different than reported on the offer

Lease terms such as ground rent and event fees must be reasonable at all times during the term of the lease and adhere to our requirements below. If you’re unsure as to whether the terms of a lease are unreasonable or onerous, please refer the details to us in plain English for Valuer consideration. If the potentially onerous terms are in relation to the ground rent please include the current ground rent figure per annum, how often it will be reviewed and the price structure it will be reviewed against. See the guidance below.

SECOND HAND PROPERTIES

Unacceptable - advise Issuing Office (Will be declined):
- Unexpired lease term less than 70 years
- Less than 30 years remaining at the end of the mortgage term
- Ground Rent greater than 0.5% of the property value
- Ground Rent doubles less than every 20 years (e.g. doubles every 5, 10 or 15 years) - acceptable if doubles every 20 years or more
- Ground Rent is compounded RPI
- Ground Rent review period less than or equal to 5 years

Refer to Issuing Office (Valuer will consider any impact on valuation figure and marketability):
- Unexpired lease term is 70 to 85 years
- Ground Rent greater than 0.1% and less than or equal to 0.5% of the property value
- Ground Rent escalation is linked to any indices greater than RPI
- Ground Rent escalation is linked to the value of the building*
- Ground Rent review period is greater than 5 and less than 10 years
- Event clauses exist for normal use e.g. changing the carpet, installing a TV aerial etc
- Estate Rent Charges greater than £500 p/a (please provide details of what the charges cover)
- Service Charges greater than 1.0% of property value p/a (please provide details of what the charges cover)
- Anything that appears onerous, unusual or out of the ordinary

Acceptable (no requirement to advise Issuing Office):
- Unexpired lease term greater than 85 years
- Ground Rent less than or equal to 0.1% of the property value
- Ground Rent review period greater than or equal to 10 years
- Ground Rent escalation less than or equal to RPI

NEW BUILD PROPERTIES (includes office conversions)

Unacceptable - advise Issuing Office (will be declined):
- Unexpired lease term less than 125 years on a new build flat or less than 250 years on a new build house
- Any lease which is subject to a ground rent (or annual rent) being charged which is more than on a peppercorn basis
- Any lease which is subject to a ground rent (or annual rent) being reviewed and altered on any review basis or methodology

Refer to Issuing Office (Valuer will consider any impact on valuation figure and marketability):
- Event clauses exist for normal use e.g. changing the carpet, installing a TV aerial etc
- Estate Rent Charges greater than £500 p/a (please provide details of what the charges cover)
- Service Charges greater than 1.0% of property value p/a (please provide details of what the charges cover)
- Anything else appears onerous, unusual or out of the ordinary

Acceptable (no requirement to advise Issuing Office):
- Unexpired lease term greater than or equal to 125 years on a new build flat or greater than or equal to 250 years on a new build house
- A lease subject to a peppercorn ground rent (annual rent) charges

For the avoidance of doubt, any new build properties completed but not sold pre 30 June 2022 will only be acceptable if the lease conforms to the above guidance

* Where the Ground Rent escalation is linked to the value of the building, please provide the following:
- How is the value of the block/unit currently calculated and if the assessment relates to the block(s), how is the Ground Rent calculated/apportioned per property?
- The current valuation and Ground Rent for each unit
- What is the mechanism for future valuations of the block and how is the Ground Rent calculated/apportioned?
- What is the right of appeal? And is this a documented process within the lease?
- Who bears the cost of the valuation (and appeal) process?
- Confirmation the review period is not less than twenty years

LEASE EXTENSIONS

We require all lease extensions to be completed under the Leasehold Reform Housing and Urban Development Act 1993 and to meet the above criteria as a minimum. Where you become aware that it does not meet these requirements, please refer to the Issuing Office
Royal Bank of Scotland Mortgage term plus 30 years.
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.

Get in touch with one of our Tilehurst lease extension solicitors or enfranchisement solicitors

Irrespective of whether you are a tenant or a landlord in Tilehurst,the lease extension experts that we work with will always be willing to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with Tilehurst valuers.

Tilehurst Lease Extension Case Summaries:

Harry, Tilehurst, Berkshire,

Harry was the the leasehold proprietor of a 2 bedroom flat in Tilehurst on the market with a lease of a few days over 72 years unexpired. Harry informally contacted his landlord being a well known Bristol-based freehold company for a lease extension. The freeholder was prepared to agree an extension on non-statutory terms taking the lease to 125 years on the basis of an increased rent to £100 yearly. No ground rent would be due on a lease extension were Harry to exercise his statutory right. Harry procured expert advice and was able to make an informed decision and deal with the matter and readily saleable.

Tilehurst case:

Mr and Mrs. O Gray took over the lease of a basement apartment in Tilehurst in May 2006. We are asked if we could approximate the price would be to prolong the lease by an additional years. Identical properties in Tilehurst with 100 year plus lease were worth £265,000. The mid-range ground rent payable was £50 billed yearly. The lease ran out on 13 February 2097. Considering the 73 years as a residual term we estimated the premium to the freeholder to extend the lease to be between £9,500 and £11,000 exclusive of expenses.

Tilehurst case:

In 2013 we were contacted by Dr Ollie Murphy who, having owned a one bedroom apartment in Tilehurst in April 2007. We are asked if we could approximate the compensation to the landlord would be to extend the lease by a further 90 years. Similar premises in Tilehurst with a long lease were valued about £264,000. The mid-range amount of ground rent was £60 billed every twelve months. The lease lapsed on 22 November 2077. Taking into account 53 years outstanding we estimated the compensation to the landlord for the lease extension to be within £37,100 and £42,800 plus legals.