Hackney 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 becomes more expensive. The majority of owners of residential leasehold property in Hackney enjoy rights under legislation to extend the terms of their leases. Where you are a leasehold owner in Hackney you really ought to check if your lease has between seventy and ninety years remaining. In particular once the remaining lease term slips under 80 years, the amount payable for any lease extension increases dramatically as an element of the premium you will incur is what is known as a marriage value
Leasehold premises in Hackney with over 100 years unexpired on the lease are often referred to as ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your home. In such circumstances there is often little upside in purchasing the freehold unless savings on ground rent and estate charges merit it.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| Santander | You must report the unexpired lease term to us and await our instructions if: 1. the unexpired term assumed by our valuer is between 55 and 82 years, but the actual unexpired term differs by more than one year (whether longer or shorter); or 2. the unexpired term assumed by our valuer is more than 82 years but the actual unexpired term is less than 82 years; or 3. no valuation report is provided However, we will not accept a lease where on expiry of the mortgage: (i) less than 50 years remain and all or part of the loan is repaid on an interest-only basis: or (ii) less than 30 years remain and the loan is repaid on a capital and interest basis We will accept a lease that has been extended under the provisions of the Leasehold Reform Act 1993 provided statutory compensation would be available to the leaseholder. |
The lawyers that we work with handle Hackney 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 lawyer we work with provide it.
During the course of the last few months Riley, came precariously close to the eighty-year mark with the lease on his basement flat in Hackney. Having bought his flat 19 years ago, the length of the lease was of little concern. by good luck, he recognised he needed to take steps soon on a lease extension. Riley arranged for a lease extension just in the nick of time last May. Riley and the landlord eventually agreed on the final figure of £5,000 . If the lease had slid below 80 years, the sum would have escalated by a minimum £1,050.
Mr and Mrs. D Moore bought a one bedroom flat in Hackney in November 2003. The dilemma was if we could estimate the compensation to the landlord would be to extend the lease by ninety years. Comparative properties in Hackney with a long lease were valued around £290,000. The average amount of ground rent was £45 invoiced annually. The lease expired on 9 January 2097. Considering the 72 years unexpired we approximated the premium to the landlord for the lease extension to be between £11,400 and £13,200 exclusive of expenses.
An example of a Freehold Enfranchisement decision for a Hackney residence is 150 Amhurst Road in December 2013. The tribunal concluded that the premium to be paid by the applicant for the enfranchisement of the subject property was £43,500. This case related to 4 flats. The remaining number of years on the lease was 90 (or thereabouts).