Hockley leases on residential properties are gradually losing value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of your lease becomes more expensive. It is the case that most Hockley tenants have the right to extend their lease by an additional ninety years in accordance with the 1993 Leasehold Reform Act. If you are a leasehold owner in Hockley you should investigate if your lease has between 70 and ninety years remaining. In particular once the remaining lease term slips under 80 years, the amount payable for any lease extension increases dramatically as part of the premium you will incur is what is known as a marriage value
Leasehold premises in Hockley with in excess of 100 years remaining on the lease are often regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your premises. In such circumstances there is often little upside in buying the reversionary interest unless savings on ground rent and maintenance charges merit it.
| 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 be at least 75 years plus the term of the mortgage at the outset of the mortgage. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Yorkshire Building Society | 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. |
Retaining our service gives you better control over the value of your Hockley leasehold, as your property will be more valuable and saleable in terms of lease length should you decide to sell. The lawyers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
After unsuccessful negotiations with the landlord of her first floor apartment in Hockley, Chloe started the lease extension process as the 80 year deadline was fast advancing. The transaction completed in January 2006. The landlord’s fees were kept to an absolute minimum.
In 2009 we were called by Mr and Mrs. E Wilson who, having moved into a one bedroom apartment in Hockley in June 2008. The question was if we could estimate the compensation to the landlord would likely be to extend the lease by a further 90 years. Comparable premises in Hockley with an extended lease were in the region of £261,600. The mid-range amount of ground rent was £60 invoiced yearly. The lease concluded in 2078. Given that there were 52 years left we approximated the compensation to the freeholder to extend the lease to be between £39,000 and £45,000 exclusive of costs.
In 2012 we were called by Mr and Mrs. I Torres who, having owned a ground floor apartment in Hockley in October 2010. We are asked if we could approximate the price could be for a ninety year extension to my lease. Comparable properties in Hockley with a long lease were in the region of £218,000. The average ground rent payable was £45 invoiced quarterly. The lease elapsed in 2089. Given that there were 63 years remaining we estimated the compensation to the landlord to extend the lease to be within £17,100 and £19,800 not including fees.