The market value of a leasehold property in Canton depends on how many years the lease has remaining. If it is close to or fewer than 80 years you should expect difficulties on re-sale, so it is recommended to arrange for a lease extension before buying. It is preferable to commence the lease extension process when the lease still has 82 years to run so that formalities can be finalised in advance of the eighty year threshold. Statute enables Canton qualifying lessees to a 90 year extension added to their unexpired lease term (ie if your lease has fifty years left the statutory lease extension will provide a new term of 140 years). The reason 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 conventional wisdom that a property with in excess of 100 years unexpired lease term is worth roughly the same as a freehold. Where an further ninety years added to all but the shortest lease, the premises will be worth the same as a freehold for decades to come.
| Lender | Requirement |
|---|---|
| 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; |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| 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. |
Lease extensions in Canton can be a difficult process. We recommend you get professional help from a conveyancing solicitor and valuer well versed in the legislation and lease extension process.
We provide you with an expert from a selection of lease extension solicitors, which ensures a targeted and efficient service as you have a dedicated port of call with an individual lawyer. Our lease extension solicitors have a wealth of experience procuring Canton lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
Harry was the the leasehold proprietor of a 2 bedroom apartment in Canton being marketed with a lease of a few days over sixty years outstanding. Harry informally spoke with his landlord a well known Bristol-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 on the basis of a new rent to start with set at £200 per annum and doubled every twenty five years thereafter. No ground rent would be payable on a lease extension were Harry to invoke his statutory right. Harry obtained expert advice and secured an acceptable resolution without going to tribunal and sell the property.
Last Christmas we were approach by Ms Chloe García , who completed a ground floor flat in Canton in May 2007. We are asked if we could approximate the compensation to the landlord would be for a 90 year lease extension. Identical homes in Canton with 100 year plus lease were valued around £205,000. The mid-range ground rent payable was £50 collected annually. The lease elapsed on 8 November 2105. Given that there were 79 years unexpired we calculated the compensation to the landlord for the lease extension to be within £8,600 and £9,800 exclusive of expenses.
Last Summer we were contacted by Mr U Rivera , who owned a purpose-built apartment in Canton in September 2009. We are asked if we could estimate the compensation to the landlord would likely be to prolong the lease by 90 years. Similar residencies in Canton with 100 year plus lease were in the region of £275,000. The average amount of ground rent was £65 collected per annum. The lease lapsed on 15 November 2094. Taking into account 68 years as a residual term we approximated the premium to the landlord for the lease extension to be within £13,300 and £15,400 plus legals.