Chances are that where you own a flat in Canary Wharf you actually own a long leasehold interest over your property
Leasehold premises in Canary Wharf with over 100 years unexpired on the lease are sometimes 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 upside in purchasing the reversionary interest unless savings on ground rent and service charges warrant it.
| Lender | Requirement |
|---|---|
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| 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. |
| 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. |
| 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. |
The conveyancing solicitors that we work with procure 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 lawyer we work with provide it.
In the wake of 6 months of lengthy discussions with the freeholder of her studio flat in Canary Wharf, Sophia initiated the lease extension process as the 80 year mark was swiftly advancing. The transaction was finalised in September 2012. The freeholder’s charges were kept to an absolute minimum.
In 2012 we were phoned by Dr Leon Stewart who, having moved into a studio apartment in Canary Wharf in October 2011. We are asked if we could estimate the compensation to the landlord would be for a 90 year extension to my lease. Similar homes in Canary Wharf with a long lease were valued about £280,000. The average amount of ground rent was £45 billed per annum. The lease ran out on 21 May 2096. Considering the 70 years remaining we approximated the premium to the landlord for the lease extension to be between £12,400 and £14,200 not including expenses.
An example of a Freehold Enfranchisement decision for a Canary Wharf premises 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 unexpired residue of the current lease was 101.61 years.