Whitland Lease Extension - Free Consultation

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Top reasons for Whitland lease extension


Why you should start your Whitland lease extension today:

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

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

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

It is generally considered that a residential leasehold with over one hundred years unexpired lease term is worth roughly the same as a freehold. Where an further ninety years added to any lease with more than 30 years remaining, the residence will be equivalent in value to a freehold for many years ahead.

Lending institutions will not finance a property on a short lease

Lenders are making their criteria more stringent and a meaningful number now expect flats to have a minimum of sixty if not seventy years left at the end of the mortgage. Considering plenty of flats in Whitland were built in the fifties, sixties and seventies as a result many now need to be extended if they if they are to be mortgageable.

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.
Lloyds TSB Scotland Mortgage term plus 30 years subject to an overall minimum term of 70 years
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 Originations (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 Originations (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 0.5% 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 Originations):
- 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 Originations (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
- Starting Ground Rent greater than 0.1% of the property value
- Ground Rent review period less than or equal to 5 years
- 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

Refer to Originations (Valuer will consider any impact on valuation figure and marketability):
- Ground Rent is linked to any indices greater than RPI
- Ground Rent is linked to the value of the building*
- 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 0.5% 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 Originations):
- 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
- Starting Ground Rent less than or equal to 0.1% of the property value
- Ground Rent review period greater than 5 years
- Ground Rent escalation less than or equal to RPI

* 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
Royal Bank of Scotland Mortgage term plus 30 years. For a Lifetime Mortgage, the term must be no less than 150 years minus the age of the Borrower.
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 Whitland?

Using our service will provide you better control over the value of your Whitland leasehold, as your property will be more valuable and saleable in relation to the lease length should you want to sell. The conveyancing solicitors that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.

Whitland Lease Extension Example Cases:

Jack, Whitland, Ammanford,

Jack was the the leasehold owner of a conversion flat in Whitland being marketed with a lease of a little over 72 years unexpired. Jack informally approached his freeholder a well known London-based freehold company and enquired on a premium to extend the lease. 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 £125 annually. No ground rent would be payable on a lease extension were Jack to exercise his statutory right. Jack obtained expert advice and was able to make a more informed decision and deal with the matter and sell the flat.

Whitland case:

In 2009 we were contacted by Dr G Young who, having completed a studio apartment in Whitland in June 2007. We are asked if we could shed any light on how much (approximately) price would be for a 90 year extension to my lease. Comparable properties in Whitland with an extended lease were in the region of £280,000. The mid-range amount of ground rent was £45 collected per annum. The lease elapsed on 8 September 2090. Given that there were 69 years remaining we estimated the compensation to the freeholder for the lease extension to be between £12,400 and £14,200 not including costs.

Whitland case:

Last year we were approach by Mr and Mrs. M Howard , who moved into a one bedroom flat in Whitland in August 2011. We are asked if we could shed any light on how much (roughly) compensation to the landlord could be to prolong the lease by an additional years. Similar properties in Whitland with 100 year plus lease were in the region of £216,000. The average amount of ground rent was £60 billed quarterly. The lease terminated in 2079. Taking into account 58 years unexpired we estimated the premium to the landlord to extend the lease to be within £28,500 and £33,000 not including legals.