It’s an underpublicised truth that a Canonbury residential lease is a deteriorating asset. The lease value drops in proportion to its lease length. The extent of this is taken for granted in the early years due to the reduction being disguised by increases in the Canonbury property market.Once your lease gets to 85ish years, you need to start considering a lease extension. If lease term slips under eighty years, you will end up paying half 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 additional value that a lease extension will add the property Most flat owners in Canonbury will be able to extend under the legislation; however a conveyancer should be able to clarify whether you are eligibility. In some situations you may not qualify. There are also strict timeframes and procedures to follow once the process is instigated and you will need to be guided by your conveyancing solicitor for the duration of the process.
Leasehold premises in Canonbury with over one hundred years remaining on the lease are often referred to as ‘virtual freehold’. This is where the lease value 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 service charges warrant 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. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must also be not less than 75 years at the outset 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. |
Engaging our service will provide you increased control over the value of your Canonbury leasehold, as your property will be more valuable and saleable in respect of lease length should you want to sell. The conveyancers that we work with have a in-depth market knowledge handling many hundreds of lease extensions or freehold purchase transactions.
After lengthy discussions with the landlord of her basement flat in Canonbury, Maisie started the lease extension process just as her lease was approaching the all-important eighty-year deadline. The transaction was concluded in February 2011. The freeholder’s costs were kept to an absolute minimum.
In 2009 we were phoned by Ms Elizabeth Lefebvre who, having bought a garden apartment in Canonbury in September 1999. The dilemma was if we could approximate the price could be for a 90 year extension to my lease. Identical properties in Canonbury with 100 year plus lease were worth £295,000. The average amount of ground rent was £45 collected every twelve months. The lease expired in 2100. Given that there were 75 years left we estimated the compensation to the landlord to extend the lease to be between £8,600 and £9,800 exclusive of costs.
An example of a Lease Extension matter before the tribunal for a Canonbury premises is 5C Stoke Newington Road in April 2010. the Tribunal therefore concludes that the premium to be paid for the extended lease is £700.00 This case affected 1 flat. The unexpired lease term was 80.5 years.