There is no doubt about it a leasehold property in Canonbury is a wasting asset as a result of the diminishing lease term. Where the residual term has, over 100 years to run then this decrease may be of little impact that being said there will become a point in time when a lease has less than 80 years unexpired as part of the premium you will incur is what is known as a marriage value. This could increase sharply the cost. It is the main rational as to why you should extend the lease sooner as opposed to later. The majority of flat owners in Canonbury will meet the qualifying criteria; nevertheless a conveyancer should be able to confirm if you are eligible to extend your lease. In limited situations you may not qualify, the most frequent reason being that you have not been the owner of the property for two years.
It is generally accepted that a property with in excess of 100 years remaining is worth approximately the equivalent as a freehold. Where an further 90 years added to all but the shortest lease, the property will be worth the same as a freehold for many years in the future.
| 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. |
| 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. |
| Skipton Building Society | 85 years from the date of completion of the mortgage For Buy to Let cases: - lettings must not breach any of the lessee’s covenants; and - consent of the lessor to lettings must be obtained if necessary |
| Yorkshire Building Society | 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. |
Retaining our service will provide you enhanced control over the value of your Canonbury leasehold, as your property will be more valuable and saleable in relation to the lease length should you decide to sell. The conveyancing solicitors that we work with have a wealth of experience of handling many hundreds of lease extensions or freehold purchase transactions.
Last October Omar, started to get close to the 80-year threshold with the lease on his garden apartment in Canonbury. In buying his property two decades ago, the unexpired term was of no significance. Thankfully, he noticed he needed to take steps soon on a lease extension. Omar extended the lease just in the nick of time last May. Omar and the landlord who owned the flat above in the end settled on an amount of £6,000 . If the lease had dipped below eighty years, the sum would have gone up by at least £1,100.
Mr and Mrs. P Wilson moved into a purpose-built flat in Canonbury in February 2003. We are asked if we could estimate the premium would likely be for a ninety year extension to my lease. Similar flats in Canonbury with an extended lease were valued around £257,800. The average amount of ground rent was £65 invoiced per annum. The lease ended on 6 July 2089. Taking into account 65 years unexpired we estimated the premium to the landlord to extend the lease to be within £17,100 and £19,800 plus costs.
An example of a Lease Extension matter before the tribunal for a Canonbury residence 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 was in relation to 1 flat. The unexpired term as at the valuation date was 80.5 years.