The re-sale value of a leasehold property in Hoxton is impacted by how long the lease has remaining. If it is close to or fewer than 80 years you should envisage problems on re-sale, so it is recommended to arrange for the lease to be extended ahead of buying. It is preferable to commence the lease extension process when a lease still has 82 years to run so that all matters can be finalised well before the 80 year cut off point. Current legislation entitles Hoxton qualifying lessees to acquire a new lease which will be for the balance of the existing lease plus a supplemental term of ninety years. The reason of the valuation is to arrive at an opinion of the premium payable by the lessee to the freeholder for the acquisition of the lease extension.
Leasehold premises in Hoxton with in excess of 100 years outstanding 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 situations there is often little upside in purchasing the freehold unless savings on ground rent and service charges justify it.
| Lender | Requirement |
|---|---|
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Birmingham Midshires | Minimum 70 years from the date 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. |
| 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 will provide you better control over the value of your Hoxton leasehold, as your property will be more valuable and saleable in relation to the lease length should you want to sell. The conveyancing solicitors that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
After protracted discussions with the freeholder of her basement apartment in Hoxton, Georgia started the lease extension process just as the lease was coming close to the all-important 80-year deadline. The legal work was finalised in March 2010. The landlord’s costs were restricted to slightly above four hundred GBP.
In 2010 we were phoned by Mrs Leah Bell who, having took over the lease of a ground floor apartment in Hoxton in April 2005. The question was if we could estimate the premium would be for a 90 year lease extension. Comparative properties in Hoxton with 100 year plus lease were worth £290,000. The average amount of ground rent was £45 billed annually. The lease elapsed in 2099. Taking into account 73 years remaining we calculated the premium to the freeholder to extend the lease to be between £9,500 and £11,000 exclusive of costs.
An example of a Lease Extension matter before the tribunal for a Hoxton flat is 137 & 139 Haberdasher Street in December 2013. The Tribunal determines in accordance with section 48 and Schedule 13 of the Leasehold Reform, Housing and Urban Development Act 1993 that the premium for the extended lease for each Property should be £12,350.00. This case related to 2 flats. The unexpired term as at the valuation date was 72.39 years.