It’s a harsh truth that a Brockley residential lease is a deteriorating asset. The lease value drops in proportion to its lease length. The extent of this is taken for granted in the first few years due to the deflation being disguised by increases in the Brockley property prices.Where your lease has approximately ninety years left, you need to start thinking about a lease extension. An important point to note is that it is desirable for lease extension to take place before the term of the existing lease falls lower than eighty years - otherwise a higher amount will be payable. Most flat owners in Brockley will be able to extend under the legislation; however a lawyer should be able to clarify if you are eligibility. In some cases you may not qualify. There are also strict timeframes and procedures to be adhered to once the process has commenced and you will need to be guided by your conveyancing solicitor from beginning to end of the process.
It is generally considered that a residential leasehold with more than one hundred years remaining is worth approximately the same as a freehold. Where an further ninety years added to all but the shortest lease, the premises will be worth the same as a freehold for many years in the future.
| 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. |
| 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| 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. |
The conveyancing solicitors that we work with handle Brockley 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 conveyancer we work with provide it.
During the course of the last few months George, came seriously close to the eighty-year mark with the lease on his ground floor flat in Brockley. In buying his flat two decades ago, the unexpired term was of no concern. Luckily, it dawned on him that he would imminently be paying an escalated premium for Extending the lease. George was able to extend his lease just in the nick of time last August. George and the freeholder via the managing agents subsequently settled on an amount of £5,000 . If the lease had slid lower than eighty years, the sum would have escalated by a minimum £1,125.
Dr P Rivera owned a ground floor flat in Brockley in June 2009. We are asked if we could estimate the price could be to extend the lease by 90 years. Identical premises in Brockley with 100 year plus lease were valued about £290,000. The mid-range amount of ground rent was £60 invoiced yearly. The lease elapsed on 3 July 2106. Considering the 80 years remaining we approximated the premium to the landlord to extend the lease to be between £13,300 and £15,400 not including legals.
An example of a Lease Extension decision for a Brockley flat is Flat b 14 Kemble Road in May 2014. The Tribunal assessed the value of the premium payable for the lease extension to be £9,761 This case related to 1 flat.