Epping leases on residential properties are gradually losing value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of your lease gets more expensive. It is the case that most Epping tenants have the right to extend their lease by an additional 90 years under the 1993 Leasehold Reform Act. If you are a leasehold owner in Epping you must check if your lease has between 70 and 90 years left. There are good reasons why a Epping flat owner with a lease having around 80 years remaining should take steps to ensure that a lease extension is actioned without delay
Leasehold residencies in Epping with in excess of 100 years unexpired on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your property. In such situations there is often little to be gained by purchasing the freehold unless savings on ground rent and maintenance charges merit it.
| Lender | Requirement |
|---|---|
| Accord Mortgages | 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. |
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage should be declined (see exception below). Leases with greater than 70 years but fewer than 85 years remaining must be referred to issuing office. Leases with fewer than 70 years should only be referred to the issuing office where the following scenario applies, as discretion may be applied subject to bank approval: • Property is located in any of the following prestigious developments: Cadogan, Crown, Grosvenor, Howard de Walden, Portman or Wellcome Trust Estates in Central London AND • The value of the property subject to the short remaining term is £500,000 or more AND • The loan to value does not exceed 90% for purchases, 90% like for like re-mortgages, 80% for re-mortgages with any element of capital raising and 80% for existing Barclays mortgage borrowers applying for additional borrowing; |
| Chelsea 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. |
| 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. |
| National Westminster Bank | Mortgage term plus 30 years. |
The lawyers that we work with handle Epping lease extensions and help protect your position. A lease extension can be arranged to be completed to coincide with a change of ownership so the costs of the lease extension are paid for using part of the sale proceeds. You really do need expert legal advice in this difficult and technical area of law. The conveyancing solicitor we work with provide it.
Teddy owned a high value apartment in Epping being marketed with a lease of a little over 72 years remaining. Teddy on an informal basis contacted his freeholder a well known Bristol-based freehold company for a lease extension. The landlord was prepared to agree an extension on non-statutory terms taking the lease to 125 years subject to an increased rent to £125 yearly. No ground rent would be due on a lease extension were Teddy to invoke his statutory right. Teddy obtained expert legal guidance and was able to make an informed decision and handle with the matter and ending up with a market value flat.
Last Summer we were e-mailed by Mr and Mrs. S Lefebvre , who bought a ground floor apartment in Epping in April 2003. We are asked if we could shed any light on how much (approximately) compensation to the landlord would likely be to prolong the lease by a further 90 years. Identical properties in Epping with 100 year plus lease were valued about £176,200. The mid-range amount of ground rent was £65 billed annually. The lease terminated on 26 April 2081. Having 56 years left we estimated the compensation to the landlord to extend the lease to be between £29,500 and £34,000 exclusive of expenses.
In 2013 we were approached by Mr and Mrs. S Wood who, having purchased a first floor flat in Epping in March 2006. The dilemma was if we could shed any light on how much (roughly) compensation to the landlord could be for a 90 year extension to my lease. Comparable premises in Epping with 100 year plus lease were valued about £242,600. The mid-range amount of ground rent was £45 billed yearly. The lease expired on 18 February 2092. Considering the 67 years as a residual term we estimated the compensation to the landlord for the lease extension to be between £11,400 and £13,200 exclusive of fees.