There is no doubt about it a leasehold flat or house in Brockley is a wasting asset as a result of the diminishing lease term. If the residual term has, more than one hundred years to run then this decrease may be of little impact however there will become a point in time when a lease has less than 80 years remaining as part of the premium you will incur is what is known as a marriage value. This could increase markedly the cost. It is the main rational as to why you should extend the lease sooner than later. Many flat owners in Brockley will meet the qualifying criteria; nevertheless a conveyancing solicitor can advise whether you are eligible to extend your lease. In limited situations you may not qualify, the most frequent reason being that you have owned the property for less than two years.
Leasehold premises in Brockley with over 100 years left on the lease are often regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your premises. In such circumstances there is often little to be gained by purchasing the freehold unless savings on ground rent and service charges justify 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. |
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage should be declined (see exception below). Leases with greater than 70 years but fewer than 85 years remaining must be referred to issuing office. 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; |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
| 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 conveyancing solicitor we work with provide it.
Austin was the the leasehold proprietor of a studio apartment in Brockley on the market with a lease of a little over 61 years unexpired. Austin on an informal basis contacted his landlord a well known Bristol-based freehold company and enquired on a premium to extend the lease. The landlord indicated a willingness to grant an extension taking the lease to 125 years on the basis of a rise in the rent to £125 per annum. No ground rent would be due on a lease extension were Austin to exercise his statutory right. Austin obtained expert legal guidance and was able to make an informed judgement and deal with the matter and sell the flat.
In 2013 we were e-mailed by Dr D Phillips who, having bought a ground floor flat in Brockley in October 2005. We are asked if we could shed any light on how much (approximately) premium would be for a ninety year lease extension. Similar flats in Brockley with a long lease were valued around £254,200. The average ground rent payable was £60 collected quarterly. The lease expired on 27 May 2076. Taking into account 51 years as a residual term we calculated the premium to the freeholder for the lease extension to be within £43,700 and £50,600 not including expenses.
An example of a Lease Extension matter before the tribunal for a Brockley premises 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 affected 1 flat.