Unfortunately that a Brockley residential lease is a deteriorating asset. The lease value reduces in proportion to its lease length. The extent of this is taken for granted in the early years due to the loss of value being disguised by increases in the Brockley property prices.Where your lease has approximately 90 years left, you need to start considering a lease extension. If lease term drops under eighty years, you will then be required to pay 50% of the property's 'marriage value' on top of the usual cost of the lease extension to the landlord. Marriage value is the amount of extra value that a lease extension will add the property The majority of flat owners in Brockley will be able to extend under the legislation; however a conveyancing solicitor will be able to confirm whether you are eligibility. In some cases you may not qualify. There are also strict deadlines and procedures to be adhered to once the process is initiated and you will need to be guided by your lawyer throughout the formalities.
Leasehold residencies in Brockley with in excess of one hundred years left on the lease are often referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your property. In such situations there is often little to be gained by buying the reversionary interest unless savings on ground rent and estate 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. |
| 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; |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Using our service will provide you better control over the value of your Brockley leasehold, as your property will be more valuable and marketable in respect of lease length should you wish to sell. The conveyancing solicitors that we work with have a wealth of experience of handling many hundreds of lease extensions or freehold purchase transactions.
Eliot was the the leasehold owner of a conversion flat in Brockley being sold with a lease of just over fifty eight years outstanding. Eliot informally approached his freeholder a well known London-based freehold company for a lease extension. The freeholder indicated a willingness to grant an extension taking the lease to 125 years on the basis of a new rent to start with set at £200 per annum and doubled every twenty five years thereafter. No ground rent would be payable on a lease extension were Eliot to invoke his statutory right. Eliot procured expert advice and was able to make an informed decision and deal with the matter and sell the flat.
In 2011 we were approached by Mr and Mrs. H Harris who, having moved into a ground floor flat in Brockley in July 2009. We are asked if we could estimate the compensation to the landlord would be for a 90 year extension to my lease. Identical residencies in Brockley with an extended lease were valued about £173,800. The mid-range ground rent payable was £60 billed quarterly. The lease ended on 25 February 2081. Taking into account 55 years as a residual term we approximated the compensation to the landlord for the lease extension to be between £31,400 and £36,200 not including expenses.
An example of a Lease Extension decision 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 was in relation to 1 flat.