It’s a harsh truth that a Hackney residential lease is a wasting asset. The lease value drops in proportion to its lease length. The extent of this is not fully appreciated in the early years due to the deflation being disguised by increases in the Hackney property market.Where your lease has approximately 90 years left, you should start thinking about a lease extension. If the number of years remaining falls under 80 years, you will end up paying 50% of the property's 'marriage value' on top of the usual cost of the lease extension to the landlord. Marriage value is the amount of additional value that a lease extension will add the property The majority of flat owners in Hackney will be able to extend under the legislation; however a conveyancing solicitor should be able to clarify if you qualify for an extension. In some cases you may not qualify. There are also strict timeframes and procedures to be adhered to once the process has commenced and you will need to be guided by your lawyer for the duration of the formalities.
It is generally considered that a residential leasehold with more than 100 years unexpired lease term is worth roughly the equivalent as a freehold. Where an further 90 years added to all but the shortest lease, the premises will be equivalent in value to a freehold for decades to come.
| Lender | Requirement |
|---|---|
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| 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. |
| 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. |
| Skipton Building Society | 85 years from the date of completion of the mortgage For Buy to Let cases: - lettings must not breach any of the lessee’s covenants; and - consent of the lessor to lettings must be obtained if necessary |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
Regardless of whether you are a tenant or a freeholder in Hackney,the lease extension lawyers that we work with will always be prepared to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Hackney valuers.
Leon owned a 2 bedroom apartment in Hackney on the market with a lease of just over fifty eight years outstanding. Leon informally approached his landlord a well known Manchester-based freehold company and enquired on a premium to extend the lease. The landlord was keen to grant an extension on non-statutory terms taking the lease to 125 years subject to a rise in the rent to £200 yearly. Ordinarily, ground rent would not be payable on a lease extension were Leon to exercise his statutory right. Leon obtained expert legal guidance and secured an acceptable resolution informally and sell the property.
In 2012 we were phoned by Mr D Harris who, having acquired a studio apartment in Hackney in March 2006. We are asked if we could approximate the compensation to the landlord would likely be to extend the lease by 90 years. Identical premises in Hackney with an extended lease were in the region of £280,000. The average amount of ground rent was £45 invoiced every twelve months. The lease terminated on 7 January 2095. Taking into account 70 years left we approximated the premium to the freeholder to extend the lease to be within £12,400 and £14,200 not including professional charges.
An example of a Freehold Enfranchisement case for a Hackney flat 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 unexpired lease term was 90 (or thereabouts).