There is no doubt about it a leasehold property in Canary Wharf is a wasting asset as a result of the shortening lease. If the residual term has, over one hundred years remaining then this decrease may be of little impact nevertheless there will become a stage when a lease has fewer than 80 years unexpired as part of the premium you will incur is what is termed as a marriage value. This could increase sharply the cost. It is the main reason why you should consider extending sooner as opposed to later. Many flat owners in Canary Wharf will meet the qualifying criteria; that being said a lawyer should be able to confirm if you are eligible to extend your lease. In limited situations you may not qualify, the most common reason being that you have not been the owner of the property for two years.
Leasehold properties in Canary Wharf with in excess of 100 years remaining on the lease are often referred to as ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your premises. In such circumstances there is often little to be gained by buying the reversionary interest unless savings on ground rent and service charges justify it.
| Lender | Requirement |
|---|---|
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Godiva Mortgages | 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. |
Regardless of whether you are a tenant or a landlord 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 experience and the close ties they enjoy with Canary Wharf valuers.
Last year Harvey, came seriously close to the eighty-year threshold with the lease on his leasehold apartment in Canary Wharf. Having purchased his property 18 years previously, the lease term was of no concern. As luck would have it, he realised he needed to take action soon on a lease extension. Harvey arranged for a lease extension just ahead of time in June. Harvey and the landlord in the end agreed on a premium of £6,000 . If the lease had dipped below eighty years, the sum would have gone up by a minimum £850.
In 2011 we were contacted by Dr U Campbell who, having took over the lease of a one bedroom apartment in Canary Wharf in August 2008. The question was if we could estimate the premium would likely be to extend the lease by ninety years. Identical properties in Canary Wharf with an extended lease were valued around £275,000. The mid-range amount of ground rent was £45 billed annually. The lease lapsed in 2094. Having 69 years remaining we estimated the compensation to the freeholder to extend the lease to be within £12,400 and £14,200 not including fees.
An example of a Freehold Enfranchisement decision for a Canary Wharf property 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 related to 3 flats. The remaining number of years on the lease was 101.61 years.