Canton leases on domestic deteriorating in value. Where your lease has about 90 years left, you should start thinking about a lease extension. An important point to note is that it is financially advisable for the lease extension to be in place before the term of the existing lease falls under eighty years - otherwise a higher amount will be payable. Leasehold owners in Canton will mostly qualify for a lease extension; however It would be wise to check with a conveyancer to check if you qualify. In certain situations you may not be entitled. There are prescribed timetables and steps to comply with once the process is triggered so it’s prudent to be guided by a conveyancing solicitor during the process.
It is generally considered that a residential leasehold with in excess of one hundred years unexpired lease term is worth roughly the equivalent as a freehold. Where an additional 90 years added to any lease with more than 35 years remaining, the property will be worth the same as a freehold for decades to come.
| Lender | Requirement |
|---|---|
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| 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. |
| 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. |
| 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. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
The lawyers that we work with undertake Canton lease extensions and help protect your position. A lease extension can be arranged to be completed to coincide with a change of ownership so the costs of the lease extension are paid for using part of the sale proceeds. You really do need expert legal advice in this difficult and technical area of law. The conveyancing solicitor we work with provide it.
Kai was the the leasehold proprietor of a high value flat in Canton being marketed with a lease of a few days over 61 years unexpired. Kai on an informal basis approached his freeholder being a well known Manchester-based freehold company for a lease extension. The freeholder indicated a willingness to extend the lease to 125 years subject to a rise in the rent to £125 annually. Ordinarily, ground rent would not be payable on a lease extension were Kai to exercise his statutory right. Kai procured expert advice and was able to make an informed judgement and handle with the matter and sell the property.
Last month we were approach by Ms R Cook , who took over the lease of a recently refurbished flat in Canton in July 2005. We are asked if we could shed any light on how much (approximately) price would be for a 90 year lease extension. Similar residencies in Canton with a long lease were in the region of £198,800. The average amount of ground rent was £55 invoiced yearly. The lease lapsed in 2081. Considering the 55 years remaining we estimated the premium to the freeholder to extend the lease to be between £33,300 and £38,400 exclusive of costs.
Mr and Mrs. C Clark bought a basement apartment in Canton in September 1995. The dilemma was if we could approximate the compensation to the landlord would likely be to prolong the lease by a further 90 years. Similar residencies in Canton with an extended lease were valued about £295,000. The mid-range amount of ground rent was £50 collected every twelve months. The lease end date was in 2101. Having 75 years left we approximated the premium to the landlord for the lease extension to be between £8,600 and £9,800 not including expenses.