Epsom and Ewell 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 gets more expensive. It is the case that most Epsom and Ewell 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 Epsom and Ewell you should check if your lease has between 70 and 90 years left. In particular once the remaining lease term slips under eighty years, the amount payable for any lease extension increases dramatically as part of the premium you will incur is what is known as a marriage value
It is conventional wisdom that a property with over 100 years remaining is worth roughly the equivalent as a freehold. Where an further ninety years added to any lease with more than 35 years remaining, the residence will be worth the same as a freehold for many years ahead.
| 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; |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
The conveyancing solicitors that we work with procure Epsom and Ewell 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.
In 2014 Luca, started to get close to the eighty-year threshold with the lease on his two bedroom flat in Epsom and Ewell. In buying his property twenty years ago, the length of the lease was of no significance. Fortunately, he realised he needed to take action soon on a lease extension. Luca extended the lease just under the wire last April. Luca and the landlord ultimately settled on an amount of £5,000 . If the lease had dropped to less than eighty years, the sum would have become more exhorbitant by a minimum £1,000.
Mr and Mrs. V Allen bought a studio apartment in Epsom and Ewell in June 2008. We are asked if we could estimate the premium could be to prolong the lease by ninety years. Identical properties in Epsom and Ewell with a long lease were valued around £254,200. The average ground rent payable was £60 invoiced yearly. The lease terminated on 7 September 2076. Given that there were 51 years remaining we approximated the compensation to the landlord for the lease extension to be within £43,700 and £50,600 not including fees.
An example of a Lease Extension case for a Epsom and Ewell property is 33 The Maisonettes Alberta Avenue in June 2014. the Tribunal decided that the premium payable for the grant of a new lease be the sum of £20,680 (Twenty Thousand six hundred and eighty pounds). This case related to 1 flat. The unexpired term as at the valuation date was 60.43 years.