Canary Wharf leases on residential properties are gradually losing value. if your lease has in the region of ninety years left, you should start thinking about a lease extension. If lease term is less than eighty years, you will then have to pay half of the property's 'marriage value' on top of the standard cost of the lease extension to your landlord. Marriage value is the amount of additional value that a lease extension will add to the property. Flat owners in Canary Wharf will usually qualify for a lease extension; however it’s a good idea to check with a conveyancing solicitor to check your eligibility. In certain circumstances you may not qualify. There are prescribed timetables and procedures to comply with once the process is triggered so it’s best to be guided by a lawyer during the process.
Leasehold residencies in Canary Wharf with more than 100 years outstanding on the lease are often regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your premises. In such situations there is often little upside in 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; |
| Skipton Building Society | 85 years from the date of completion of the mortgage For Buy to Let cases: - lettings must not breach any of the lessee’s covenants; and - consent of the lessor to lettings must be obtained if necessary |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
Retaining our service gives you better control over the value of your Canary Wharf leasehold, as your property will be more valuable and saleable in terms of lease length should you wish to sell. The lawyers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
During the course of the last few months Jack, came precariously close to the 80-year threshold with the lease on his basement apartment in Canary Wharf. In buying his home two decades ago, the lease term was of little importance. As luck would have it, he recognised he would imminently be paying way over the odds for a lease extension. Jack extended the lease at the eleventh hour last August. Jack and the landlord who owned the flat above in the end settled on a premium of £5,000 . If he had missed the deadline, the premium would have become more costly by a minimum £900.
Last July we were phoned by Mr and Mrs. S Wright , who took over the lease of a recently refurbished apartment in Canary Wharf in October 1998. We are asked if we could approximate the price would be for a 90 year lease extension. Identical residencies in Canary Wharf with an extended lease were worth £260,200. The average ground rent payable was £65 billed annually. The lease ran out in 2092. Given that there were 66 years as a residual term we estimated the premium to the freeholder for the lease extension to be within £15,200 and £17,600 plus legals.
An example of a Freehold Enfranchisement case for a Canary Wharf flat 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 was in relation to 3 flats. The unexpired term as at the valuation date was 101.61 years.