It’s a harsh truth that a Canary Wharf residential lease is a deteriorating asset. The lease value drops in proportion to its lease length. The extent of this is not fully appreciated in the early years due to the deflation being disguised by increases in the Canary Wharf property prices.Once your lease gets to 85ish years, 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 dips lower than 80 years - otherwise a higher amount will be payable. The majority of flat owners in Canary Wharf will be able to extend under the legislation; however a lawyer should be able to confirm whether you qualify for an extension. In some cases you may not qualify. There are also strict timetables and procedures to follow once the process is initiated and you will need to be guided by your lawyer throughout the process.
Leasehold premises in Canary Wharf with over 100 years unexpired on the lease are often regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your home. In such circumstances there is often little to be gained by buying the reversionary interest unless savings on ground rent and estate charges warrant it.
| Lender | Requirement |
|---|---|
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Retaining our service will provide you increased control over the value of your Canary Wharf leasehold, as your property will be more valuable and marketable in terms of lease length should you wish to sell. The conveyancers that we work with have a wealth of experience of handling many hundreds of lease extensions or freehold purchase transactions.
Following lengthy correspondence with the freeholder of her leasehold flat in Canary Wharf, Millie commenced the lease extension process as the 80 year threshold was fast coming. The transaction was concluded in March 2011. The landlord’s costs were restricted to a tad over 500 GBP.
Last year we were contacted by Mr Felix Roberts , who bought a basement apartment in Canary Wharf in November 2005. The dilemma was if we could shed any light on how much (roughly) compensation to the landlord would likely be for a 90 year extension to my lease. Identical premises in Canary Wharf with an extended lease were in the region of £210,000. The average amount of ground rent was £50 collected per annum. The lease elapsed in 2105. Given that there were 80 years outstanding we calculated the premium to the landlord to extend the lease to be between £8,600 and £9,800 not including fees.
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 was in relation to 3 flats. The remaining number of years on the lease was 101.61 years.