Brixton leases on residential properties are gradually losing value. The shorter the remaining lease term becomes, the less it is worth – and accordingly any extension of your lease becomes more expensive. Legislation has been in place for sometime now which entitles qualifying Brixton residential leaseholders to extend the terms of long leases. If you are a leasehold owner in Brixton you really ought to check if your lease has between seventy and 90 years left. There are compelling reasons why a Brixton leaseholder with a lease having around 80 years left should take steps to make sure that a lease extension is actioned without delay
Leasehold premises in Brixton with over 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 home. In such circumstances there is often little upside in purchasing the reversionary interest unless savings on ground rent and service charges merit it.
| 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. |
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| 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. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
Irrespective of whether you are a tenant or a landlord in Brixton,the lease extension lawyers 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 Brixton valuers.
During the course of the last few months Finn, came dangerously near to the 80-year threshold with the lease on his one bedroom apartment in Brixton. Having purchased his property twenty years previously, the unexpired term was of little interest. Thankfully, he became aware that he needed to take steps soon on Extending the lease. Finn was able to extend his lease just in the nick of time in May. Finn and the freeholder in the end agreed on sum of £6,000 . If the lease had slid to less than 80 years, the sum would have escalated by at least £925.
In 2013 we were called by Mr F Mercier who, having took over the lease of a recently refurbished flat in Brixton in February 1995. We are asked if we could shed any light on how much (approximately) premium would be for a ninety year extension to my lease. Identical properties in Brixton with an extended lease were worth £300,000. The mid-range amount of ground rent was £50 billed monthly. The lease ended on 16 April 2102. Having 76 years as a residual term we calculated the compensation to the freeholder for the lease extension to be between £8,600 and £9,800 plus legals.
An example of a Freehold Enfranchisement matter before the tribunal for a Brixton flat is 66 Southwell Road in March 2012. By Order of Deputy District Judge Stone dated 25 January 2012 a vesting order was made. The determination of the purchase price was referred to the Tribunal who decided that the amount payable for the freehold should be£29,612.00 This case affected 3 flats. The unexpired term was 72.58 years.