The market value of a leasehold property in Hoxton depends on how long the lease has left to run. If it is near to or less than 80 years you should anticipate problems on re-sale, so it is advisable to arrange for a lease extension before buying. Ideally one should start the lease extension process when a lease still has 82 years remaining so that formalities can be concluded in advance of the eighty year threshold. Current legislation enables Hoxton qualifying lessees to acquire a new lease which will be for the current unexpired lease term plus a supplemental term of ninety years. The intention of the valuation is to determine the premium payable by the lessee to the freeholder for the purchase of the lease extension.
It is generally considered that a residential leasehold with in excess of 100 years remaining is worth approximately the same as a freehold. Where an additional 90 years added to any lease with more than 30 years unexpired, the property will be equivalent in value to a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| Lloyds TSB Scotland | Minimum 70 years from the date 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. |
| 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 |
The conveyancers 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 lawyer we work with provide it.
After protracted negotiations with the landlord of her one bedroom apartment in Hoxton, Alisha initiated the lease extension process as the 80 year threshold was fast approaching. The lease extension was concluded in November 2009. The landlord’s charges were kept to an absolute minimum.
Last Summer we were phoned by Mr and Mrs. V Martinez , who bought a purpose-built apartment in Hoxton in February 2002. The question was if we could estimate the price could be to extend the lease by 90 years. Similar premises in Hoxton with a long lease were worth £200,000. The average ground rent payable was £50 collected per annum. The lease ran out in 2103. Given that there were 78 years left we approximated the compensation to the freeholder for the lease extension to be within £8,600 and £9,800 not including costs.
An example of a Lease Extension decision for a Hoxton flat 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 unexpired residue of the current lease was 72.39 years.