Chances are that if you own a flat in Hackney you actually own a long leasehold interest over your property
It is conventional wisdom that a property with over 100 years remaining is worth roughly the same as a freehold. Where an further 90 years added to any lease with more than 45 years remaining, the property will be worth the same as 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. |
| 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. |
| 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. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Engaging our service will provide you better control over the value of your Hackney leasehold, as your property will be more valuable and saleable in respect of lease length should you wish to sell. The conveyancers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Last Autumn Jude, came critically near to the eighty-year threshold with the lease on his leasehold flat in Hackney. Having purchased his property two decades ago, the length of the lease was of no relevance. Luckily, it dawned on him that he needed to take action soon on a lease extension. Jude extended the lease just under the wire last March. Jude and the freeholder ultimately settled on an amount of £5,500 . If the lease had gone to less than 80 years, the price would have increased by a minimum £950.
Last month we were phoned by Dr Jade François , who acquired a one bedroom flat in Hackney in November 2009. The question was if we could approximate the compensation to the landlord would be for a ninety year lease extension. Comparable flats in Hackney with an extended lease were valued around £248,000. The mid-range ground rent payable was £65 invoiced annually. The lease finished on 11 November 2089. Given that there were 63 years as a residual term we estimated the compensation to the freeholder to extend the lease to be between £20,900 and £24,200 plus professional charges.
An example of a Freehold Enfranchisement decision for a Hackney property 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 was in relation to 4 flats. The unexpired lease term was 90 (or thereabouts).