The market value of a leasehold property in Canonbury depends on how many years the lease has left to run. If it is near to or less than eighty years you should anticipate problems on re-sale, so it is advisable to arrange for a lease extension before buying. It is preferable to start the lease extension process when a lease still has 82 years to run so that all matters can be concluded ahead of the eighty year threshold. Statute entitles Canonbury qualifying lessees to an additional term of 90 years in addition to the remaining term, at a nominal rent (no ground rent). The purpose of the valuation is to arrive at an opinion of the premium payable by the lessee to the freeholder for the acquisition of the lease extension.
It is generally accepted that a residential leasehold with in excess of 100 years remaining is worth approximately the equivalent as a freehold. Where an additional 90 years added to all but the shortest lease, the premises will be worth the same as a freehold for decades to come.
| 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 are not acceptable. 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. |
| Godiva Mortgages | A minimum of 70 years unexpired lease at completion for all scheme types apart from Lifetime Mortgages (Equity Release), which require a minimum unexpired term of 80 years at completion. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
Retaining our service gives you better control over the value of your Canonbury leasehold, as your property will be more valuable and marketable in relation to the 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.
Seth was the the leasehold owner of a 2 bedroom flat in Canonbury being sold with a lease of just over fifty eight years outstanding. Seth on an informal basis spoke with his freeholder a well known Bristol-based freehold company and enquired on a premium to extend the lease. The freeholder was keen to grant an extension on non-statutory terms taking the lease to 125 years on the basis of an increased rent to £125 yearly. No ground rent would be due on a lease extension were Seth to invoke his statutory right. Seth obtained expert advice and secured an acceptable deal without resorting to tribunal and sell the property.
Last Christmas we were called by Mr and Mrs. U Brown , who bought a studio flat in Canonbury in September 1999. The dilemma was if we could estimate the compensation to the landlord would likely be to prolong the lease by a further 90 years. Comparable flats in Canonbury with a long lease were in the region of £233,200. The average amount of ground rent was £60 collected quarterly. The lease ended in 2087. Taking into account 61 years as a residual term we estimated the compensation to the landlord for the lease extension to be within £22,800 and £26,400 not including costs.
An example of a Lease Extension decision 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 related to 1 flat. The number of years remaining on the existing lease(s) was 80.5 years.