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Top reasons for Tremeirchion lease extension


Main reasons to commence your Tremeirchion lease extension today:

Increase your lease and increase your Tremeirchion property value

The basic rule is, all other factors being equal, the shorter the lease the more expensive the premium. Qualifying leaseholders in Tremeirchion have the right to extend the lease for an additional ninety years in accordance with legislation. Do give careful consideration before delaying your Tremeirchion lease extension. Postponing the costs today simply escalates the premium you will eventually have to pay to extend the lease.

An extended lease is almost the same value as a freehold

It is generally considered that a property with over one hundred years unexpired lease term is worth roughly the equivalent as a freehold. Where an additional ninety years added to all but the shortest lease, the property will be worth the same as a freehold for many years in the future.

Lenders may not finance a property on a short lease

Mortgage Lenders vary in their lending criteria. Some set the bar at seventy five years left on the lease; others may be willing to lend with anything with more than 70 years. With less than sixty years, it may be challenging to obtain a mortgage in the first place.

Lender Requirement
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.
National Westminster Bank Mortgage term plus 30 years.
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 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
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.

Why use us for your lease extension in Tremeirchion?

Regardless of whether you are a tenant or a landlord in Tremeirchion,the lease extension lawyers that we work with will always be willing to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Tremeirchion valuers.

Tremeirchion Lease Extension Case Summaries:

Phoebe, Tremeirchion, Denbighshire,

Subsequent to protracted correspondence with the landlord of her purpose-built apartment in Tremeirchion, Phoebe commenced the lease extension process just as her lease was nearing the crucial 80-year threshold. The lease extension was finalised in May 2008. The freeholder’s costs were restricted to a tad over 600 pounds.

Tremeirchion case:

Mr and Mrs. M Clark acquired a one bedroom flat in Tremeirchion in May 2005. The dilemma was if we could approximate the premium could be to extend the lease by ninety years. Similar properties in Tremeirchion with an extended lease were valued around £183,600. The average amount of ground rent was £65 invoiced per annum. The lease ended on 7 November 2081. Taking into account 57 years as a residual term we estimated the compensation to the landlord to extend the lease to be between £28,500 and £33,000 not including fees.

Tremeirchion case:

In 2011 we were called by Dr L Alexander who, having acquired a basement apartment in Tremeirchion in October 2011. The dilemma was if we could shed any light on how much (approximately) compensation to the landlord could be to extend the lease by an additional years. Similar properties in Tremeirchion with a long lease were in the region of £245,000. The mid-range ground rent payable was £50 invoiced annually. The lease elapsed on 2 July 2092. Considering the 68 years outstanding we approximated the compensation to the freeholder to extend the lease to be within £9,500 and £11,000 exclusive of professional charges.