Cannington leases on residential properties are gradually losing value. The shorter the remaining lease term becomes, the less it is worth – and accordingly any extension of the lease becomes more expensive. Legislation has been in place for sometime now which permits qualifying Cannington residential leaseholders to extend the terms of long leases. Where you are a leasehold owner in Cannington you must investigate if your lease has between seventy and 90 years remaining. In particular once the remaining lease term slips under eighty years, the amount payable for any lease extension sharply increases as an element of the premium you pay is what is known as a marriage value
Leasehold properties in Cannington with over one hundred years outstanding on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your home. In such situations there is often little to be gained by purchasing the reversionary interest unless savings on ground rent and maintenance charges justify it.
| Lender | Requirement |
|---|---|
| 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; |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Santander | You must report the unexpired lease term to us and await our instructions if: 1. the unexpired term assumed by our valuer is between 55 and 82 years, but the actual unexpired term differs by more than one year (whether longer or shorter); or 2. the unexpired term assumed by our valuer is more than 82 years but the actual unexpired term is less than 82 years; or 3. no valuation report is provided However, we will not accept a lease where on expiry of the mortgage: (i) less than 50 years remain and all or part of the loan is repaid on an interest-only basis: or (ii) less than 30 years remain and the loan is repaid on a capital and interest basis We will accept a lease that has been extended under the provisions of the Leasehold Reform Act 1993 provided statutory compensation would be available to the leaseholder. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Engaging our service gives you better control over the value of your Cannington leasehold, as your property will be more valuable and saleable in relation to the lease length should you decide to sell. The lawyers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Off the back of unsuccessful discussions with the landlord of her studio apartment in Cannington, Imogen started the lease extension process as the 80 year threshold was fast approaching. The lease extension was concluded in February 2012. The landlord’s costs were restricted to slightly above 500 pounds.
In 2011 we were e-mailed by Mr and Mrs. U Bell who, having took over the lease of a garden apartment in Cannington in August 1997. We are asked if we could estimate the compensation to the landlord would likely be to extend the lease by 90 years. Identical properties in Cannington with a long lease were valued around £227,800. The average ground rent payable was £45 billed monthly. The lease termination date was in 2090. Having 65 years unexpired we calculated the compensation to the freeholder to extend the lease to be within £13,300 and £15,400 plus legals.
In 2011 we were approached by Mr G Fournier who, having was assigned a lease of a first floor apartment in Cannington in July 2000. We are asked if we could approximate the compensation to the landlord could be for a ninety year lease extension. Identical properties in Cannington with a long lease were in the region of £275,000. The mid-range ground rent payable was £55 billed annually. The lease concluded in 2101. Given that there were 76 years outstanding we approximated the compensation to the freeholder for the lease extension to be within £9,500 and £11,000 exclusive of costs.