Unfortunately that a Canning Town residential lease is a wasting asset. As the lease term diminishes so does the value of the property. The extent of this is taken for granted in the early years due to the reduction being disguised by increases in the Canning Town property prices.Once your lease gets to 85ish years, you should start considering a lease extension. If the number of years remaining slips below eighty years, you will end up paying 50% of the property's 'marriage value' in addition to the usual cost of the lease extension to the landlord. Marriage value is the amount of extra value that a lease extension will add the property Most leasehold owners in Canning Town will be able to extend under the legislation; however a lawyer should be able to confirm if you are eligibility. In some cases you may not qualify. There are also strict deadlines and procedures to be adhered to once the process is instigated and you will need to be guided by your conveyancing solicitor throughout the process.
It is generally accepted that a property with more than 100 years unexpired lease term is worth approximately the same as a freehold. Where an additional 90 years added to any lease with more than 30 years unexpired, the premises will be worth the same as a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| 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; |
| Halifax | Minimum 70 years from the date of the mortgage. |
| 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 lawyers that we work with handle Canning Town 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 conveyancer we work with provide it.
Gabriel owned a conversion apartment in Canning Town on the market with a lease of a little over 72 years left. Gabriel informally contacted his landlord a well known local-based freehold company and enquired on a premium to extend the lease. The freeholder indicated a willingness to extend the lease to 125 years on the basis of an increased rent to £100 per annum. No ground rent would be due on a lease extension were Gabriel to exercise his statutory right. Gabriel procured expert legal guidance and was able to make an informed judgement and deal with the matter and sell the property.
Last Autumn we were e-mailed by Mr and Mrs. O Bonnet , who bought a ground floor flat in Canning Town in April 2005. We are asked if we could estimate the premium would be to prolong the lease by ninety years. Comparative residencies in Canning Town with an extended lease were worth £275,000. The mid-range amount of ground rent was £55 billed every twelve months. The lease ended in 2102. Given that there were 77 years unexpired we calculated the compensation to the landlord for the lease extension to be within £13,300 and £15,400 exclusive of costs.
An example of a Lease Extension matter before the tribunal for a Canning Town residence is 46 Credon Road in January 2014. On 11 September 2013 Deputy District Judge Price sitting at the Bow County Court made a vesting order that the freeholder surrender his lease and be granted a new lease of the Premises on such terms as may be determined by the First Tier Tribunal (Property Chamber).The appropriate sum as concluded by the Tribunal was £7225 This case was in relation to 1 flat. The unexpired term as at the valuation date was 69.77 years.