It’s a harsh truth that a Canvey Island residential lease is a deteriorating asset. The lease value reduces in proportion to its lease length. The extent of this is not fully appreciated in the first few years due to the reduction being disguised by increases in the Canvey Island property prices.Once your lease gets to 85ish years, you need to start considering a lease extension. An important point to note is that it is desirable for lease extension to take place before the term of the existing lease dips below eighty years - otherwise a higher amount will be payable. Most leasehold owners in Canvey Island will be able to extend under the legislation; however a conveyancer should be able to clarify whether you are eligibility. In some situations you may not be entitled. There are also strict timeframes and procedures to be adhered to once the process is initiated and you will need to be guided by your conveyancer for the duration of the process.
It is conventional wisdom that a property with more than one hundred years unexpired lease term is worth approximately the same as a freehold. Where an additional 90 years added to all but the shortest lease, the premises will be equivalent in value to a freehold for decades to come.
| Lender | Requirement |
|---|---|
| Coventry Building Society | 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. |
| 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
The conveyancing solicitors that we work with handle Canvey Island 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 lawyer we work with provide it.
Last October Adam, started to get near to the eighty-year mark with the lease on his two bedroom apartment in Canvey Island. Having purchased his flat twenty years previously, the lease term was of no concern. Thankfully, he became aware that he would soon be paying an escalated premium for a lease extension. Adam was able to extend his lease just under the wire in August. Adam and the freeholder via the management company eventually settled on the final figure of £5,500 . If he had missed the deadline, the premium would have become more exhorbitant by at least £1,100.
Last month we were phoned by Mr J Wood , who acquired a one bedroom apartment in Canvey Island in June 2010. We are asked if we could approximate the premium could be to extend the lease by an additional years. Identical premises in Canvey Island with a long lease were valued around £191,400. The mid-range ground rent payable was £55 collected yearly. The lease elapsed on 3 June 2079. Having 54 years left we approximated the premium to the freeholder for the lease extension to be within £34,200 and £39,600 exclusive of legals.
In 2013 we were approached by Mr and Mrs. Y Garcia who, having bought a first floor flat in Canvey Island in November 2001. We are asked if we could shed any light on how much (approximately) compensation to the landlord would be to extend the lease by 90 years. Comparative homes in Canvey Island with a long lease were valued about £295,000. The mid-range amount of ground rent was £45 collected per annum. The lease expiry date was in 2099. Having 74 years unexpired we calculated the compensation to the freeholder to extend the lease to be within £9,500 and £11,000 plus fees.