Owning a flat usually means owning a lease of the property, this is a ‘time-limited’ interest becoming shorter every day. This lease will normally be granted for a fixed period of time , ordinarily 99 or 125 years, although we have come across longer and shorter terms in Brockley. Clearly, the period of lease remaining shortens over time. This is often overlooked and only raises itself as an issue when the property has to be disposed of or refinanced. The shorter the lease the less it is worth and the more it will cost to procure a lease extension. Qualifying leaseholders in Brockley have the right to extend the lease for an additional ninety years under statute. You should give due deliberation before putting off your Brockley lease extension. Putting off that expense now likely increases the price you will ultimately incur for a lease extension
It is conventional wisdom that a residential leasehold with more than 100 years remaining is worth approximately the same as a freehold. Where an further 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 |
|---|---|
| Coventry Building Society | 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. |
| 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. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
Retaining our service gives you enhanced control over the value of your Brockley leasehold, as your property will be more valuable and saleable in terms of lease length should you wish to sell. The lawyers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Michael owned a high value apartment in Brockley on the market with a lease of a little over 72 years left. Michael informally spoke with his landlord being a well known Manchester-based freehold company and enquired on a premium to extend the lease. The landlord was keen to give an extension on non-statutory terms taking the lease to 125 years subject to a rise in the rent to £50 annually. No ground rent would be due on a lease extension were Michael to exercise his statutory right. Michael obtained expert advice and secured an acceptable resolution without resorting to tribunal and sell the property.
Last Winter we were approach by Mr and Mrs. R Thomas , who owned a first floor apartment in Brockley in March 1999. We are asked if we could estimate the compensation to the landlord would be to extend the lease by ninety years. Identical residencies in Brockley with 100 year plus lease were worth £245,000. The mid-range ground rent payable was £50 billed every twelve months. The lease concluded in 2094. Considering the 68 years left we approximated the compensation to the freeholder for the lease extension to be between £9,500 and £11,000 exclusive of legals.
An example of a Lease Extension case 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.