Canterbury 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 allowing qualifying Canterbury residential leaseholders to extend the terms of long leases. Where you are a leasehold owner in Canterbury you would be well advised to see if your lease has between 70 and 90 years remaining. In particular once the remaining lease term slips under 80 years, the amount payable for any lease extension sharply increases as part of the premium you pay is what is known as a marriage value
It is conventional wisdom that a property with in excess of one hundred years remaining is worth roughly the equivalent as a freehold. Where an further 90 years added to any lease with more than 30 years unexpired, the property will be worth the same as a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| Chelsea 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. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. |
| 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. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
Irrespective of whether you are a tenant or a landlord in Canterbury,the lease extension solicitors that we work with will always be prepared to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with Canterbury valuers.
14 months ago Mason, started to get close to the 80-year threshold with the lease on his leasehold apartment in Canterbury. Having purchased his home twenty years ago, the unexpired term was of little concern. Thankfully, he realised he would imminently be paying an inflated amount for a lease extension. Mason arranged for a lease extension at the eleventh hour in September. Mason and the landlord in the end settled on a premium of £5,000 . If he not met the deadline, the price would have gone up by a minimum £1,000.
In 2012 we were called by Dr Georgina Vincent who, having purchased a one bedroom apartment in Canterbury in February 2004. The dilemma was if we could approximate the compensation to the landlord could be to prolong the lease by a further 90 years. Comparable properties in Canterbury with an extended lease were in the region of £176,200. The average ground rent payable was £65 billed quarterly. The lease ended in 2081. Given that there were 56 years as a residual term we estimated the compensation to the landlord to extend the lease to be within £29,500 and £34,000 exclusive of expenses.
In 2012 we were phoned by Dr N Moreau who, having took over the lease of a one bedroom flat in Canterbury in September 2006. We are asked if we could shed any light on how much (approximately) premium would likely be for a 90 year lease extension. Similar flats in Canterbury with an extended lease were in the region of £242,600. The average amount of ground rent was £45 invoiced quarterly. The lease came to a finish on 18 March 2092. Taking into account 67 years remaining we estimated the compensation to the freeholder for the lease extension to be between £11,400 and £13,200 exclusive of costs.