There is no doubt about it a leasehold property in Canvey Island is a wasting asset as a result of the shortening lease. Where the residual term has, beyond 99 years remaining then this decrease may be negligible nevertheless there will become a stage when a lease has under than 80 years remaining as part of the premium you will incur is what is termed as a marriage value. This could increase markedly the cost. It is the main logic behind why you should consider extending sooner rather than later. Many flat owners in Canvey Island will qualify for this right; however a lawyer will be able to advise whether you are eligible to extend your lease. In limited situations you may not qualify, the most common reason being that you have owned the property for under two years.
It is conventional wisdom that a residential leasehold with in excess of 100 years remaining is worth approximately the equivalent as a freehold. Where an further 90 years added to all but the shortest lease, the property will be worth the same as a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage should be declined (see exception below). Leases with greater than 70 years but fewer than 85 years remaining must be referred to issuing office. 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; |
| 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. |
| 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. |
Lease extensions in Canvey Island can be a difficult process. We recommend you get guidance from a lawyer 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 dealing with Canvey Island lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
Teddy owned a studio apartment in Canvey Island being marketed with a lease of a little over 59 years outstanding. Teddy informally spoke with his landlord being a well known local-based freehold company for a lease extension. The landlord indicated a willingness to extend the lease to 125 years on the basis of a new rent to start with set at £100 per annum and increase every 25 years thereafter. No ground rent would be payable on a lease extension were Teddy to exercise his statutory right. Teddy obtained expert legal guidance and secured satisfactory resolution without going to tribunal and ending up with a market value flat.
Last Christmas we were called by Dr J Bonnet , who was assigned a lease of a garden apartment in Canvey Island in January 2010. We are asked if we could estimate the compensation to the landlord could be for a 90 year extension to my lease. Comparative premises in Canvey Island with a long lease were valued around £280,000. The average amount of ground rent was £45 invoiced monthly. The lease finished on 8 October 2094. Considering the 69 years left we calculated the compensation to the landlord for the lease extension to be between £12,400 and £14,200 not including legals.
Mr and Mrs. C Lewis acquired a basement apartment in Canvey Island in April 1998. We are asked if we could shed any light on how much (roughly) premium would be to prolong the lease by 90 years. Similar homes in Canvey Island with an extended lease were worth £216,000. The average ground rent payable was £60 invoiced per annum. The lease concluded on 25 September 2083. Given that there were 58 years unexpired we approximated the premium to the freeholder to extend the lease to be within £28,500 and £33,000 exclusive of professional charges.