The re-sale value of a leasehold property in Canvey Island depends on how long the lease has remaining. If it is close to or less than 80 years you should envisage problems on re-sale, so it is advisable to arrange for a lease extension prior to purchasing. It is preferable to start the lease extension process when the lease still has 82 years remaining so that all matters can be finalised well before the eighty year mark. Current legislation enables Canvey Island qualifying lessees to an additional term of 90 years on top of the unexpired term, at a notional rent (zero ground rent). The reason of the valuation is to determine the sum 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 remaining is worth roughly the equivalent 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 many years in the future.
| Lender | Requirement |
|---|---|
| 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; |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| 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. |
| 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. |
| Lloyds TSB Scotland | Minimum 70 years from the date of the mortgage. |
Regardless of whether you are a tenant or a landlord in Canvey Island,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 experience and the close ties they enjoy with Canvey Island valuers.
Last Spring Max, came dangerously close to the eighty-year mark with the lease on his first floor apartment in Canvey Island. In buying his home two decades ago, the length of the lease was of minimal relevance. As luck would have it, he realised he would soon be paying way over the odds for a lease extension. Max arranged for a lease extension just in the nick of time last June. Max and the landlord who owned the flat above eventually settled on a premium of £6,000 . If he not met the deadline, the amount would have become more exhorbitant by a minimum £1,100.
Last Summer we were phoned by Mr and Mrs. V Torres , who acquired a basement apartment in Canvey Island in October 1996. We are asked if we could shed any light on how much (approximately) premium could be for a ninety year lease extension. Comparable homes in Canvey Island with an extended lease were worth £295,000. The average ground rent payable was £45 collected annually. The lease finished on 17 February 2099. Given that there were 74 years left we estimated the compensation to the landlord to extend the lease to be within £8,600 and £9,800 exclusive of professional charges.
Last year we were called by Ms J Nguyen , who moved into a one bedroom flat in Canvey Island in August 2010. The dilemma was if we could estimate the compensation to the landlord could be for a 90 year extension to my lease. Comparative properties in Canvey Island with a long lease were valued around £243,000. The mid-range amount of ground rent was £65 collected quarterly. The lease expired in 2088. Having 63 years outstanding we approximated the compensation to the freeholder to extend the lease to be within £20,000 and £23,000 not including expenses.