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Main reasons to start your Tintagel lease extension


Top reasons for lease extension now:

A Tintagel lease depreciates with the years remaining on the lease.

Tintagel leases on residential properties are gradually losing value. The shorter the remaining lease term becomes, the less it is worth – and accordingly any extension of the lease becomes more expensive. It is the case that most Tintagel tenants have the right to extend their lease by an additional ninety years under the 1993 Leasehold Reform Act. Where you are a leasehold owner in Tintagel you must investigate if your lease has between seventy and ninety years remaining. In particular once the remaining lease term slips under eighty years, the premium due on any lease extension increases dramatically as an element of the premium you will incur is what is known as a marriage value

Tintagel property with a lease extension is almost the same value as a freehold

Leasehold premises in Tintagel with more than 100 years unexpired on the lease are often referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your home. In such situations there is often little to be gained by purchasing the reversionary interest unless savings on ground rent and maintenance charges justify it.

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

Nearly all mortgage companies will be unwilling to grant a mortgage on a lease with under 70 years left to run - although this varies between mortgage companies. A purchaser will likely find it difficult to obtain a mortgage and this will result in your Tintagel property becoming difficult to dispose of or refinance.

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.
Godiva Mortgages 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.
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.

What makes us experts in Tintagel lease extensions?

Lease extensions in Tintagel can be a difficult process. We recommend you secure professional help from a lawyer and surveyor with experience in this area.

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 in-depth market knowledge dealing with Tintagel lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.

Tintagel Lease Extension Case Summaries:

Rachel, Tintagel, Cornwall,

Subsequent to protracted correspondence with the landlord of her leasehold flat in Tintagel, Rachel commenced the lease extension process as the eighty year threshold was fast nearing. The legal work was finalised in June 2008. The landlord’s fees were restricted to less than 550 GBP.

Tintagel case:

Last May we were phoned by Mr Jacob Martin , who moved into a one bedroom apartment in Tintagel in April 2012. The question was if we could estimate the premium would be for a 90 year lease extension. Identical flats in Tintagel with a long lease were in the region of £205,000. The average amount of ground rent was £50 collected quarterly. The lease ended in 2102. Having 78 years outstanding we calculated the compensation to the landlord to extend the lease to be between £7,600 and £8,800 exclusive of legals.

Tintagel case:

Last year we were e-mailed by Mr and Mrs. H Norbert , who moved into a one bedroom flat in Tintagel in July 1997. We are asked if we could shed any light on how much (approximately) price would be to prolong the lease by an additional years. Identical flats in Tintagel with an extended lease were valued around £267,600. The average amount of ground rent was £65 collected yearly. The lease expired in 2091. Having 67 years unexpired we approximated the compensation to the freeholder to extend the lease to be within £14,300 and £16,400 plus expenses.