For anyone whose Canterbury flat is held on a long lease, our message is clear – if you ignore the situation, your property will eventually revert to your landlord, leaving you empty-handed. The shorter the lease the lower the value of the property and the more expensive it will be to obtain a lease extension.
Leasehold premises in Canterbury with in excess of one hundred years left on the lease are often regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your property. In such situations there is often little upside in buying the freehold unless savings on ground rent and estate charges merit it.
| Lender | Requirement |
|---|---|
| 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. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
| 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. |
Using our service will provide you enhanced control over the value of your Canterbury leasehold, as your property will be more valuable and marketable in respect of lease length should you want to sell. The lawyers that we work with have a in-depth market knowledge handling many hundreds of lease extensions or freehold purchase transactions.
David was the the leasehold proprietor of a studio apartment in Canterbury being marketed with a lease of a little over 61 years left. David on an informal basis approached his freeholder a well known Manchester-based freehold company and enquired on a premium to extend the lease. The freeholder was prepared to agree an extension on non-statutory terms taking the lease to 125 years subject to an increased rent to £125 per annum. Ordinarily, ground rent would not be payable on a lease extension were David to invoke his statutory right. David obtained expert legal guidance and was able to make an informed decision and deal with the matter and sell the property.
In 2010 we were e-mailed by Ms U Adams who, having owned a purpose-built flat in Canterbury in November 2008. The dilemma was if we could shed any light on how much (roughly) premium would likely be to extend the lease by 90 years. Comparative properties in Canterbury with an extended lease were worth £260,000. The average amount of ground rent was £50 billed quarterly. The lease expiry date was in 2098. Given that there were 72 years unexpired we approximated the compensation to the freeholder for the lease extension to be within £9,500 and £11,000 plus legals.
In 2010 we were approached by Dr J Brown who, having acquired a newly refurbished apartment in Canterbury in April 2006. We are asked if we could shed any light on how much (roughly) premium could be to extend the lease by a further 90 years. Similar homes in Canterbury with an extended lease were valued about £256,600. The mid-range amount of ground rent was £60 invoiced yearly. The lease ended in 2078. Considering the 52 years remaining we approximated the compensation to the landlord to extend the lease to be within £39,000 and £45,000 not including legals.