Canning Town residential property owned on a long lease is a wasting asset as the leaseholder merely owns the property for a set term.
Leasehold properties in Canning Town with more than one hundred years outstanding on the lease are often referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your premises. In such circumstances there is often little upside in buying the reversionary interest unless savings on ground rent and estate charges warrant 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. |
| 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; |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
Lease extensions in Canning Town can be a difficult process. We recommend you obtain professional help from a conveyancing solicitor and valuer with experience in lease extensions.
We provide you with an expert from a selection of lease extension solicitors, which ensures a targeted and efficient service as you have a dedicated port of call with an individual lawyer. Our lease extension solicitors have in-depth market knowledge procuring Canning Town lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
Elijah owned a high value flat in Canning Town on the market with a lease of fraction over sixty years outstanding. Elijah on an informal basis approached his landlord a well known local-based freehold company and enquired on a premium to extend the lease. The landlord was keen to agree an extension on non-statutory terms taking the lease to 125 years on the basis of an increased rent to £125 annually. Ordinarily, ground rent would not be payable on a lease extension were Elijah to invoke his statutory right. Elijah procured expert legal guidance and secured an acceptable resolution without resorting to tribunal and sell the property.
Dr K García purchased a one bedroom apartment in Canning Town in April 1996. The dilemma was if we could estimate the compensation to the landlord would likely be to extend the lease by 90 years. Similar properties in Canning Town with an extended lease were valued about £285,000. The average amount of ground rent was £55 billed quarterly. The lease finished in 2105. Having 80 years left we approximated the compensation to the freeholder to extend the lease to be between £12,400 and £14,200 plus legals.
An example of a Lease Extension case 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 lease term was 69.77 years.