Unfortunately that a Canary Wharf residential lease is a wasting asset. The lease value drops in proportion to its lease length. The extent of this is taken for granted in the first few years due to the deflation being disguised by increases in the Canary Wharf property market.Where your lease has approximately 90 years left, you should start considering a lease extension. An important point to note is that it is desirable for lease extension to take place before the term of the existing lease slips below eighty years - otherwise a higher amount will be payable. Most leasehold owners in Canary Wharf will be able to extend under the legislation; however a conveyancing solicitor should be able to confirm whether you are eligibility. In some situations you may not qualify. There are also strict timetables and procedures to follow once the process is instigated and you will need to be guided by your lawyer for the duration of the process.
It is conventional wisdom that a residential leasehold with over 100 years unexpired lease term is worth approximately the equivalent as a freehold. Where an further 90 years added to all but the shortest lease, the property will be worth the same as a freehold for many years in the future.
| 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 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; |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| 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. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
Irrespective of whether you are a tenant or a freeholder in Canary Wharf,the lease extension experts that we work with will always be willing to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Canary Wharf valuers.
In recent months Jacob, came perilously close to the 80-year mark with the lease on his garden flat in Canary Wharf. Having bought his property 19 years previously, the length of the lease was of little interest. Thankfully, he recognised he needed to take steps soon on a lease extension. Jacob extended the lease at the eleventh hour last June. Jacob and the landlord ultimately agreed on a premium of £5,000 . If he had missed the deadline, the premium would have become more costly by at least £1,000.
Last Summer we were phoned by Mr and Mrs. K François , who completed a one bedroom apartment in Canary Wharf in May 1997. The question was if we could shed any light on how much (approximately) compensation to the landlord would likely be to prolong the lease by ninety years. Comparable premises in Canary Wharf with a long lease were in the region of £285,000. The average ground rent payable was £45 collected quarterly. The lease lapsed in 2096. Given that there were 72 years as a residual term we estimated the premium to the landlord for the lease extension to be between £12,400 and £14,200 exclusive of legals.
An example of a Freehold Enfranchisement decision 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 unexpired lease term was 101.61 years.