Epworth 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 your lease gets more expensive. It is the case that most Epworth tenants have the right to extend their lease by an additional 90 years by virtue of the 1993 Leasehold Reform Act. If you are a leasehold owner in Epworth you would be well advised to check if your lease has between 70 and 90 years left. There are good reasons why a Epworth leaseholder with a lease having around 80 years remaining should take steps to ensure that a lease extension is actioned without delay
It is conventional wisdom that a residential leasehold with more than one hundred years unexpired lease term is worth approximately the equivalent as a freehold. Where an additional ninety years added to any lease with more than 35 years remaining, the premises will be equivalent in value to a freehold for many years in the future.
| 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 are not acceptable. 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
The conveyancing solicitors that we work with handle Epworth 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 conveyancer we work with provide it.
Dylan owned a high value flat in Epworth on the market with a lease of just over 72 years remaining. Dylan informally spoke with his freeholder being a well known local-based freehold company and enquired on a premium to extend the lease. The landlord indicated a willingness to extend the lease to 125 years on the basis of a rise in the rent to £200 yearly. No ground rent would be due on a lease extension were Dylan to invoke his statutory right. Dylan obtained expert advice and was able to make a more informed decision and handle with the matter and sell the property.
Mrs U Rodríguez moved into a garden flat in Epworth in May 1998. The dilemma was if we could estimate the premium would be to extend the lease by 90 years. Comparable homes in Epworth with 100 year plus lease were in the region of £275,000. The mid-range ground rent payable was £45 billed monthly. The lease end date was on 26 April 2095. Given that there were 69 years as a residual term we estimated the compensation to the freeholder for the lease extension to be between £12,400 and £14,200 plus fees.
Last Christmas we were called by Mr and Mrs. J Mitchell , who bought a studio apartment in Epworth in September 2009. We are asked if we could approximate the compensation to the landlord would be to prolong the lease by 90 years. Comparable residencies in Epworth with 100 year plus lease were in the region of £216,000. The mid-range ground rent payable was £60 billed quarterly. The lease terminated in 2084. Having 58 years as a residual term we estimated the compensation to the freeholder for the lease extension to be within £28,500 and £33,000 plus expenses.