Unfortunately that a Hackney residential lease is a wasting asset. The lease value reduces in proportion to its lease length. The extent of this is taken for granted in the first few years due to the reduction being disguised by increases in the Hackney property market.Where your lease has approximately ninety years left, you need to start thinking about a lease extension. If the number of years remaining drops below eighty years, you will end up paying half of the property's 'marriage value' in addition to the usual cost of the lease extension to the landlord. Marriage value is the amount of extra value that a lease extension will add the property The majority of leasehold owners in Hackney will be able to extend under the legislation; however a conveyancing solicitor should be able to clarify if 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 lawyer for the duration of the process.
Leasehold residencies in Hackney with more than one hundred years left on the lease are often referred to as ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your home. In such circumstances there is often little upside in buying the freehold unless savings on ground rent and estate charges merit it.
| Lender | Requirement |
|---|---|
| HSBC | All Residential leasehold properties must have more than 30 years remaining on the lease beyond the term of the mortgage at the outset. All Buy to Let leasehold properties must have more than 35 years remaining on the lease beyond the term of the mortgage at the outset. |
| Leeds Building Society | 85 years remaing from the start of the mortgage. |
| Nationwide Building Society | Our minimum unexpired lease term is 55 years subject to at least 30 years remaining at the end of the mortgage term. Report to the issuing office if the lease term is shorter than that stated on the offer and has less than 100 years remaining. (There is no requirement to report if the lease term is lower than that stated on the offer but still has 100 years or more to run, or if the lease term is longer than that stated on the offer). NEW BUILD PROPERTIES (includes office conversions) The following are not acceptable: - The unexpired lease term is less than 125 years on a new build flat or 250 years on a new build house (does not apply to Shared Ownership) - Starting ground rent is more than 0.1% of the property value The lease must be amended to comply with the above. If not the case cannot proceed. Please advise us where the case cannot proceed. Ground rents and event fees: Ground rent and other event fees must be reasonable at all times during the lease term. For example, it is acceptable for ground rent escalation to be linked to RPI (Retail Price Index) or a similar index and where this is the case we do not need to be advised. However, unreasonable multipliers of ground rent will not be permitted, for example, doubling every 5, 10 or 15 years. These must be referred to us and we will advise if our mortgage offer remains valid. If you are unsure as to whether the terms of a lease are unreasonable, please refer the details to us. |
| TSB | Mortgage term plus 30 years subject to an overall minimum term of 70 years |
| The Mortgage Works | Minimum unexpired lease term is 70 years with 30 years remaining at the end of the mortgage term. Report to the issuing office if the lease term is shorter than that stated within the Offer and has less than 100 years remaining.(There is no requirement to report if the lease term is lower than that stated on the Offer but still has 100 years or more to run, or if the lease term is longer than that stated on the Offer). NEW BUILD PROPERTIES (includes office conversions) The following are not acceptable: - The unexpired lease term on a new build flat is less than 125 years - The unexpired lease term on a new build house is less than 250 years - Starting ground rent is more than 0.1% of the property value The lease must be amended to comply with the above. If not the case cannot proceed. Please advise us where the case cannot proceed. Ground rents and event fees: Ground rent and other event fees must be reasonable at all times during the lease term. For example, it is acceptable for ground rent escalation to be linked to RPI (Retail Price Index) or a similar index and where this is the case we do not need to be advised. However, unreasonable multipliers of ground rent will not be permitted, for example, doubling every 5, 10 or 15 years. These must be referred to us and we will advise if our mortgage offer remains valid. If you are unsure as to whether the terms of a lease are unreasonable, please refer the details to us. |
Regardless of whether you are a tenant or a freeholder in Hackney,the lease extension lawyers that we work with will always be happy 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.
Luca was the the leasehold owner of a high value flat in Hackney on the market with a lease of a few days over fifty eight years outstanding. Luca informally contacted his freeholder being a well known London-based freehold company for a lease extension. The freeholder indicated a willingness to extend the lease to 125 years subject to a new rent initially set at £150 per annum and increase every 25 years thereafter. No ground rent would be payable on a lease extension were Luca to invoke his statutory right. Luca procured expert legal guidance and secured an acceptable resolution without going to tribunal and ending up with a market value flat.
Last Christmas we were approach by Mr and Mrs. O White , who moved into a basement flat in Hackney in February 2007. The dilemma was if we could estimate the compensation to the landlord would likely be to prolong the lease by ninety years. Comparative premises in Hackney with a long lease were worth £270,000. The mid-range amount of ground rent was £65 collected annually. The lease ran out in 2086. Taking into account 68 years left we approximated the premium to the freeholder to extend the lease to be between £12,400 and £14,200 not including costs.
An example of a Freehold Enfranchisement matter before the tribunal 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).