Owning a flat usually means owning a lease of the property, this is a ‘time-limited’ interest becoming shorter every day. This lease will usually be granted for a prescribed period of time , ordinarily 99 or 125 years, although we have come across longer and shorter terms in Hackney. Clearly, the term of lease remaining shortens over time. This is often overlooked and only raises itself as an issue when the property needs to be disposed of or re-mortgaged. The shorter the lease the less it is worth and the more expensive it will be to extend the lease. Eligible long lease owners in Hackney have the right to extend the lease for a further 90 years in accordance with legislation. Do give due consideration before putting off your Hackney lease extension. Holding off the cost now likely increases the price you will ultimately incur to extend your lease
It is generally considered that a residential leasehold with in excess of 100 years remaining is worth approximately 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 many years ahead.
| Lender | Requirement |
|---|---|
| Accord Mortgages | 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. |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 30 years plus the term of the mortgage at the outset of the mortgage. |
Regardless of whether you are a tenant or a freeholder in Hackney,the lease extension solicitors 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.
During the course of the last few months Thomas, came very close to the eighty-year mark with the lease on his garden flat in Hackney. Having purchased his home 19 years previously, the unexpired term was of minimal concern. Thankfully, he realised he would imminently be paying an inflated amount for Extending the lease. Thomas arranged for a lease extension just in the nick of time last March. Thomas and the landlord eventually agreed on an amount of £6,000 . If he not met the deadline, the premium would have escalated by a minimum £975.
Dr Harriet Watson purchased a purpose-built flat in Hackney in October 2000. We are asked if we could estimate the premium would likely be for a ninety year lease extension. Comparative flats in Hackney with an extended lease were valued about £181,600. The mid-range amount of ground rent was £55 invoiced monthly. The lease elapsed on 21 February 2078. Taking into account 52 years unexpired we estimated the compensation to the landlord for the lease extension to be between £30,400 and £35,200 not including fees.
An example of a Freehold Enfranchisement decision for a Hackney residence 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 term was 90 (or thereabouts).