Owning a flat usually means owning a lease of the property, which has a set term of years. This lease will usually be granted for a prescribed period of time , usually 99 or 125 years, although we have come across longer and shorter terms in Epping. Clearly, the period of lease remaining reduces over time. This may pass by relatively unnoticed when the flat or house has to be disposed of or refinanced. The fewer the years remaining the lower the value of the property and the more expensive it will be to procure a lease extension. Qualifying long lease owners in Epping have the legal entitlement to extend the lease for an additional ninety years in accordance with the 1993 Leasehold Reform Act. Please give careful consideration before putting off your Epping lease extension. Holding off the cost now likely increases the price you will ultimately incur to extend your lease
It is conventional wisdom that a residential leasehold with in excess of one hundred years remaining is worth roughly the equivalent as a freehold. Where an additional 90 years added to all but the shortest lease, the premises will be equivalent in value to a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| 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. |
| 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 30 years plus the term of the mortgage at the outset of the mortgage. |
| Santander | If the property is leasehold, the remaining unexpired lease term at the end of the new mortgage term must be at least 50 years where any part of the mortgage is on Interest Only and 30 years if all loan parts are on Capital Repayment and Interest. You must report the unexpired lease term to us and await our instructions if:
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The conveyancing solicitors that we work with undertake 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.
George owned a high value flat in Epping being sold with a lease of a few days over 61 years left. George on an informal basis approached his landlord being a well known local-based freehold company for a lease extension. The landlord was prepared to give an extension on non-statutory terms taking the lease to 125 years subject to an increased rent to £200 yearly. No ground rent would be payable on a lease extension were George to exercise his statutory right. George procured expert advice and was able to make a more informed judgement and handle with the matter and ending up with a market value flat.
Last Summer we were phoned by Mr and Mrs. S Collins , who owned a studio apartment in Epping in April 1996. We are asked if we could shed any light on how much (roughly) compensation to the landlord would be to prolong the lease by an additional years. Comparable premises in Epping with a long lease were in the region of £260,000. The average ground rent payable was £50 invoiced monthly. The lease ended in 2098. Having 72 years unexpired we estimated the compensation to the landlord for the lease extension to be between £9,500 and £11,000 exclusive of fees.
In 2013 we were called by Mr and Mrs. O Lambert who, having bought a ground floor apartment in Epping in February 2007. The question was if we could estimate the price would likely be to extend the lease by 90 years. Identical homes in Epping with a long lease were in the region of £256,600. The mid-range ground rent payable was £60 invoiced monthly. The lease ended in 2078. Taking into account 52 years as a residual term we approximated the compensation to the landlord to extend the lease to be within £39,000 and £45,000 exclusive of costs.