Brockley leases on residential properties are gradually losing value. Where your lease has about 90 years remaining, you should start considering the need for a lease extension. If lease term is under eighty years, you will then have to pay 50% of the property's 'marriage value' on top of the standard cost of the lease extension to the landlord. Marriage value is the amount of additional value that a lease extension will add to the property. Flat owners in Brockley will mostly qualify for a lease extension; however It would be wise to check with a conveyancing solicitor to confirm if you qualify. In certain situations you may not qualify. There are prescribed deadlines and formalities to follow once the process is triggered so it’s wise to be guided by a conveyancing solicitor during the process.
It is conventional wisdom that a residential leasehold with over 100 years remaining is worth roughly the equivalent as a freehold. Where an further ninety years added to any lease with more than 30 years remaining, the residence will be equivalent in value to a freehold for many years in the future.
| 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; |
| 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. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
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 lawyer we work with provide it.
Adam was the the leasehold proprietor of a conversion apartment in Brockley on the market with a lease of just over 61 years remaining. Adam informally contacted his landlord a well known Manchester-based freehold company for a lease extension. The freeholder indicated a willingness to extend the lease to 125 years subject to an increased rent to £200 per annum. Ordinarily, ground rent would not be payable on a lease extension were Adam to exercise his statutory right. Adam obtained expert advice and secured an acceptable resolution without resorting to tribunal and readily saleable.
Mr and Mrs. R Bell moved into a ground floor flat in Brockley in September 2012. The question was if we could approximate the compensation to the landlord would be to extend the lease by ninety years. Comparable properties in Brockley with an extended lease were valued around £225,400. The average ground rent payable was £45 invoiced yearly. The lease expired on 8 August 2090. Taking into account 64 years unexpired we calculated the premium to the freeholder for the lease extension to be within £15,200 and £17,600 plus costs.
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 was in relation to 1 flat.