When it comes to residential leasehold property in Hockley, you are actually purchasing an entitlement to live in a property for a set period of time. Modern flat leases are usually granted for 99 years or 125. Even though this may appear like a long period of time, you should think about a lease extension sooner rather than later. The general rule is that the shorter the number of years is the cost of extending the lease becomes disproportionately greater notably when there are fewer than 80 years left. Residents in Hockley with a lease drawing near to 81 years left should seriously consider extending it without delay. Once the lease term has under eighty years outstanding, under the relevant statute the freeholder is entitled to calculate and charge a greater amount, based on a technical calculation, strangely termed as “marriage value” which is payable.
It is generally considered that a residential leasehold with in excess of 100 years unexpired lease term is worth approximately the equivalent as a freehold. Where an additional 90 years added to all but the shortest lease, the residence will be worth the same as a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage should be declined (see exception below). Leases with greater than 70 years but fewer than 85 years remaining must be referred to issuing office. 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; |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| 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. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
Irrespective of whether you are a tenant or a freeholder in Hockley,the lease extension lawyers that we work with will always be willing to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Hockley valuers.
In recent months Zachary, came precariously near to the eighty-year threshold with the lease on his first floor apartment in Hockley. In buying his flat two decades ago, the length of the lease was of no significance. Luckily, he realised he needed to take action soon on a lease extension. Zachary was able to extend his lease just under the wire in June. Zachary and the landlord who owned the flat above eventually agreed on a premium of £5,500 . If the lease had dipped lower than 80 years, the price would have escalated by at least £1,150.
Last Autumn we were called by Mr A Young , who bought a one bedroom apartment in Hockley in June 2001. We are asked if we could approximate the premium would be to extend the lease by 90 years. Comparable flats in Hockley with an extended lease were in the region of £255,000. The average ground rent payable was £50 invoiced monthly. The lease lapsed in 2095. Taking into account 70 years as a residual term we calculated the compensation to the landlord to extend the lease to be between £10,500 and £12,000 plus expenses.
Mr L Pérez bought a basement flat in Hockley in October 2008. We are asked if we could estimate the premium would likely be to prolong the lease by ninety years. Similar premises in Hockley with a long lease were in the region of £246,800. The mid-range amount of ground rent was £60 invoiced annually. The lease termination date was on 22 January 2075. Having 50 years outstanding we approximated the compensation to the freeholder to extend the lease to be between £44,700 and £51,600 exclusive of costs.