Canary Wharf leases on residential deteriorating in value. Where your lease has approximately 90 years unexpired, you should start thinking about a lease extension. 80 years is a significant number: when the unexpired term of a lease dips below this level then you begin paying an additional element called marriage value. Leasehold owners in Canary Wharf will usually qualify for a lease extension; however a solicitor should be able confirm your eligibility. In certain situations you may not be entitled. There are also strict timetables and procedures to comply with once the process has commenced so it’s prudent to be guided by a conveyancing solicitor during the process.
It is conventional wisdom that a residential leasehold with in excess of 100 years remaining is worth roughly the same as a freehold. Where an additional ninety years added to all but the shortest lease, the property will be worth the same as a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| Chelsea 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. |
| Halifax | Minimum 70 years from the date 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. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
| 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 Canary Wharf 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.
Two years ago Reuben, came perilously near to the 80-year mark with the lease on his garden flat in Canary Wharf. In buying his flat 19 years previously, the length of the lease was of no bearing. Thankfully, he recognised he would imminently be paying an escalated premium for Extending the lease. Reuben extended the lease at the eleventh hour in March. Reuben and the landlord who owned the flat above subsequently settled on the final figure of £5,000 . If the lease had slid below 80 years, the price would have escalated by a minimum £1,100.
Last Spring we were called by Mr Alfie Cook , who acquired a basement apartment in Canary Wharf in August 1999. We are asked if we could estimate the compensation to the landlord would be for a 90 year extension to my lease. Similar properties in Canary Wharf with 100 year plus lease were in the region of £225,800. The mid-range amount of ground rent was £60 billed per annum. The lease lapsed in 2085. Taking into account 60 years outstanding we approximated the premium to the landlord for the lease extension to be between £23,800 and £27,400 exclusive of expenses.
An example of a Freehold Enfranchisement matter before the tribunal for a Canary Wharf residence is 12, 14 & 16 Hull Close in May 2010. the Tribunal determined that the premium payable for the acquisition of the freehold to the subject premises was the sum of £18,300 This case affected 3 flats. The number of years remaining on the existing lease(s) was 101.61 years.