Hackney residential property owned on a long lease is a wasting asset because a leaseholder merely owns the property for a period of years.
It is generally considered that a property with over 100 years remaining is worth approximately the same as a freehold. Where an additional ninety 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 |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must also be not less than 75 years at the outset of the mortgage. |
| 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 |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
Lease extensions in Hackney can be a difficult process. We recommend you procure guidance from a conveyancer and surveyor with experience in lease extensions.
We provide you with an expert from a selection of lease extension solicitors, which ensures a targeted and efficient service as you have a dedicated port of call with an individual lawyer. Our lease extension solicitors have in-depth market knowledge dealing with Hackney lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
Twenty four months ago Aaron, started to get close to the eighty-year mark with the lease on his leasehold flat in Hackney. Having bought his property two decades ago, the lease term was of little concern. Fortunately, he became aware that he would soon be paying an inflated amount for Extending the lease. Aaron was able to extend his lease just ahead of time last March. Aaron and the freeholder subsequently settled on sum of £5,000 . If the lease had slid below eighty years, the amount would have escalated by at least £1,075.
In 2014 we were e-mailed by Dr A Morel who, having completed a basement flat in Hackney in May 2009. We are asked if we could estimate the compensation to the landlord would be to extend the lease by a further 90 years. Comparative properties in Hackney with a long lease were in the region of £265,200. The mid-range ground rent payable was £65 invoiced quarterly. The lease concluded on 22 March 2091. Given that there were 66 years unexpired we approximated the compensation to the landlord for the lease extension to be between £15,200 and £17,600 exclusive of legals.
An example of a Freehold Enfranchisement decision for a Hackney flat 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 affected 4 flats. The number of years remaining on the existing lease(s) was 90 (or thereabouts).