It’s an underpublicised truth that a Brixton 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 first few years due to the deflation being disguised by increases in the Brixton property market.Once your lease gets to 85ish years, you should start thinking about a lease extension. If the number of years remaining dips below eighty years, you will end up paying half of the property's 'marriage value' on top of the usual cost of the lease extension to the landlord. The marriage fee is the amount of extra value that a lease extension will add the property Most leasehold owners in Brixton will be able to extend under the legislation; however a conveyancing solicitor should be able to confirm if you qualify for an extension. In some situations you may not be entitled. There are also strict deadlines and procedures to follow once the process has commenced and you will need to be guided by your lawyer for the duration of the process.
It is generally accepted that a residential leasehold with over one hundred years remaining is worth roughly the equivalent as a freehold. Where an additional 90 years added to all but the shortest lease, the premises will be worth the same as a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage are not acceptable. Leases with fewer than 70 years should only be referred to the issuing office where the following scenario applies, as discretion may be applied subject to bank approval: • Property is located in any of the following prestigious developments: Cadogan, Crown, Grosvenor, Howard de Walden, Portman or Wellcome Trust Estates in Central London AND • The value of the property subject to the short remaining term is £500,000 or more AND • The loan to value does not exceed 90% for purchases, 90% like for like re-mortgages, 80% for re-mortgages with any element of capital raising and 80% for existing Barclays mortgage borrowers applying for additional borrowing; |
| 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
Regardless of whether you are a tenant or a landlord in Brixton,the lease extension experts that we work with will always be happy to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with Brixton valuers.
In the wake of 6 months of lengthy correspondence with the landlord of her basement apartment in Brixton, Georgia started the lease extension process just as her lease was approaching the critical 80-year deadline. The lease extension was concluded in October 2011. The landlord’s charges were restricted to about 500 pounds.
Ms W Allen was assigned a lease of a one bedroom flat in Brixton in January 2011. We are asked if we could approximate the premium could be for a 90 year lease extension. Similar properties in Brixton with an extended lease were in the region of £213,600. The mid-range amount of ground rent was £60 invoiced annually. The lease finished in 2083. Considering the 57 years unexpired we approximated the compensation to the freeholder to extend the lease to be within £30,400 and £35,200 plus expenses.
An example of a Freehold Enfranchisement decision for a Brixton property 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 was in relation to 3 flats. The remaining number of years on the lease was 72.58 years.