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Main reasons to commence your Porthcawl lease extension


Main reasons to commence your Porthcawl lease extension today:

Increase your lease and increase your Porthcawl property value

On the balance of probabilities where you own a flat in Porthcawl you actually own a long leasehold interest over your property

Porthcawl property with a lease extension has roughly the same value as a freehold

It is generally considered that a property with in excess of 100 years remaining is worth roughly the equivalent as a freehold. Where an additional ninety years added to any lease with more than 45 years unexpired, the property will be equivalent in value to a freehold for decades to come.

Mortgage lenders may decide not to lend on a short lease

The propensity since the credit crunch has been for mortgage companies to tighten lending criteria across the board - this has extended to the types of security over which the mortgage is to be charged. This has meant the unexpired lease term required by banks has increased. In the past mortgage companies would lend on a lease with twenty years plus the term of the loan - typically 50 year leases but those requirements are being increasingly undermined by the requirement for longer and longer leases - many now have a minimum term of 75 years as standard.

Lender Requirement
Leeds Building Society 85 years remaining from the start of the mortgage.
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
Virgin 85 years at the time of completion. If it's less, we require it to be extended on or before completion.

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

Lease extensions in Porthcawl can be a difficult process. We recommend you get guidance from a conveyancer and valuer with experience in lease extensions.

We provide you with an expert from a selection of lease extension solicitors, which ensures a targeted and efficient service as you have a dedicated port of call with an individual lawyer. Our lease extension solicitors have a wealth of experience dealing with Porthcawl lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.

Porthcawl Lease Extension Case Summaries:

Chloe, Porthcawl, Bridgend,

Trailing protracted discussions with the freeholder of her first floor apartment in Porthcawl, Chloe initiated the lease extension process as the 80 year threshold was quickly approaching. The lease extension completed in May 2011. The landlord’s fees were negotiated to below 550 GBP.

Porthcawl case:

Dr B Peterson bought a purpose-built flat in Porthcawl in July 2005. We are asked if we could shed any light on how much (approximately) compensation to the landlord would be to extend the lease by a further 90 years. Similar properties in Porthcawl with a long lease were in the region of £290,000. The average amount of ground rent was £45 billed quarterly. The lease termination date was on 13 November 2097. Considering the 73 years as a residual term we calculated the compensation to the landlord to extend the lease to be within £8,600 and £9,800 plus expenses.

Porthcawl case:

In 2014 we were contacted by Mr and Mrs. U Murphy who, having completed a ground floor apartment in Porthcawl in September 2007. The question was if we could approximate the compensation to the landlord would be for a ninety year lease extension. Comparative properties in Porthcawl with an extended lease were in the region of £240,600. The average amount of ground rent was £65 invoiced every twelve months. The lease expired on 19 May 2086. Considering the 62 years left we calculated the compensation to the landlord to extend the lease to be within £21,900 and £25,200 not including professional charges.