With a domestic leasehold property in Hoxton, you are actually purchasing an entitlement to reside in a property for a set period of time. These days flat leases are usually granted for 99 years or 125. Many leasehold owners become complacent as this seems like a lengthy period of time, you may consider extending the lease sooner rather than later. Accepted thinking is that the shorter the lease is the cost of extending the lease increases markedly particularly when there are less than 80 years remaining. Leasehold owners in Hoxton with a lease approaching 81 years left should seriously think of extending it sooner rather than later. When a lease has below 80 years left, under the current legislation the landlord is entitled to calculate and levy a greater premium, based on a technical calculation, known as “marriage value” which is due.
Leasehold premises in Hoxton 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 property. In such situations there is often little upside in buying the freehold unless savings on ground rent and estate charges warrant it.
| Lender | Requirement |
|---|---|
| Chelsea 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. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| 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. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
The conveyancing solicitors that we work with undertake Hoxton lease extensions and help protect your position. A lease extension can be arranged to be completed to coincide with a change of ownership so the costs of the lease extension are paid for using part of the sale proceeds. You really do need expert legal advice in this difficult and technical area of law. The conveyancing solicitor we work with provide it.
Last year Reuben, started to get close to the eighty-year threshold with the lease on his purpose- built flat in Hoxton. Having bought his home two decades ago, the length of the lease was of no interest. by good luck, he became aware that he needed to take action soon on a lease extension. Reuben arranged for a lease extension just ahead of time last March. Reuben and the landlord eventually agreed on a premium of £6,000 . If he had missed the deadline, the premium would have become more costly by at least £900.
In 2009 we were called by Ms Kate Fournier who, having moved into a one bedroom flat in Hoxton in August 2004. We are asked if we could approximate the compensation to the landlord would likely be to extend the lease by 90 years. Similar properties in Hoxton with an extended lease were valued around £285,000. The average ground rent payable was £45 billed annually. The lease ran out on 11 September 2097. Having 71 years left we estimated the compensation to the landlord to extend the lease to be between £12,400 and £14,200 exclusive of fees.
An example of a Lease Extension case for a Hoxton residence 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 affected 2 flats. The unexpired term as at the valuation date was 72.39 years.