It’s a harsh certainty that a Hockley residential lease is a wasting asset. The lease value drops in proportion to its lease length. The extent of this is not fully appreciated in the early years due to the loss of value being disguised by increases in the Hockley property market.Where your lease has approximately 90 years left, you should start thinking about a lease extension. If the number of years remaining falls below eighty years, you will end up paying 50% 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 Most leasehold owners in Hockley will be able to extend under the legislation; however a lawyer will be able to clarify if you are eligibility. In some situations you may not be entitled. There are also strict timetables and procedures to follow once the process has commenced and you will need to be guided by your lawyer throughout the formalities.
It is conventional wisdom that a property with more than one hundred years unexpired lease term is worth approximately the same as a freehold. Where an further 90 years added to any lease with more than 30 years left, the residence will be equivalent in value to a freehold for decades to come.
| 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. |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Godiva Mortgages | A minimum of 70 years unexpired lease at completion for all scheme types apart from Lifetime Mortgages (Equity Release), which require a minimum unexpired term of 80 years at completion. |
| 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 |
Irrespective of whether you are a tenant or a freeholder in Hockley,the lease extension solicitors that we work with will always be willing to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with Hockley valuers.
Last Christmas William, started to get near to the 80-year threshold with the lease on his two bedroom flat in Hockley. Having purchased his property two decades ago, the unexpired term was of little significance. As luck would have it, it dawned on him that he would imminently be paying way over the odds for Extending the lease. William arranged for a lease extension just in the nick of time last May. William and the landlord who owned the flat above eventually agreed on the final figure of £6,000 . If he had missed the deadline, the premium would have gone up by at least £1,000.
Mr and Mrs. D Bertrand owned a ground floor flat in Hockley in January 2009. We are asked if we could approximate the premium could be to prolong the lease by an additional years. Comparative homes in Hockley with an extended lease were in the region of £225,400. The mid-range amount of ground rent was £45 billed monthly. The lease came to a finish on 5 April 2090. Taking into account 64 years as a residual term we estimated the premium to the freeholder to extend the lease to be between £15,200 and £17,600 not including expenses.
In 2010 we were phoned by Mr and Mrs. W Ward who, having purchased a purpose-built flat in Hockley in October 2008. We are asked if we could shed any light on how much (roughly) compensation to the landlord could be for a ninety year lease extension. Similar flats in Hockley with 100 year plus lease were valued about £270,000. The average ground rent payable was £55 invoiced every twelve months. The lease finished in 2101. Given that there were 75 years remaining we estimated the compensation to the freeholder to extend the lease to be between £9,500 and £11,000 not including legals.