It’s an underpublicised truth that a Hoxton residential lease is a deteriorating asset. As the lease term reduces so does the value of the property. The extent of this is taken for granted in the early years due to the reduction being disguised by increases in the Hoxton property prices.Once your lease nears 85ish years, you need to start considering a lease extension. If lease term drops below 80 years, you will then be required to pay half 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 Most flat owners in Hoxton will be able to extend under the legislation; however a conveyancing solicitor should be able to confirm whether you are eligibility. In some situations you may not be entitled. There are also strict timetables and procedures to be adhered to once the process has commenced and you will need to be guided by your conveyancer for the duration of the formalities.
Leasehold premises in Hoxton with more than one hundred years remaining on the lease are often regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your property. In such situations there is often little to be gained by 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. |
| 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. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
The lawyers that we work with undertake Hoxton 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.
Twenty four months ago Sam, started to get near to the 80-year mark with the lease on his leasehold flat in Hoxton. In buying his home twenty years previously, the unexpired term was of no significance. by good luck, he realised he would imminently be paying an inflated amount for Extending the lease. Sam was able to extend his lease just in the nick of time in September. Sam and the freeholder via the management company in the end settled on an amount of £5,000 . If the lease had dipped lower than eighty years, the sum would have escalated by at least £1,150.
In 2010 we were phoned by Mr and Mrs. Y André who, having purchased a newly refurbished apartment in Hoxton in February 2008. We are asked if we could shed any light on how much (roughly) compensation to the landlord would likely be to extend the lease by 90 years. Similar premises in Hoxton with an extended lease were in the region of £191,400. The mid-range amount of ground rent was £55 collected annually. The lease lapsed in 2079. Having 54 years unexpired we estimated the premium to the landlord for the lease extension to be within £34,200 and £39,600 not including professional charges.
An example of a Lease Extension case for a Hoxton premises is 137 & 139 Haberdasher Street in December 2013. The Tribunal determines in accordance with section 48 and Schedule 13 of the Leasehold Reform, Housing and Urban Development Act 1993 that the premium for the extended lease for each Property should be £12,350.00. This case affected 2 flats. The number of years remaining on the existing lease(s) was 72.39 years.