For anyone whose Canvey Island flat is held on a long lease, the message is clear – if you do nothing, the property will ultimately revert to your landlord, leaving you empty-handed. The fewer the years remaining the lower the value of the property and the more expensive it will be to obtain a lease extension.
It is conventional wisdom that a residential leasehold with in excess of one hundred years remaining is worth approximately the same as a freehold. Where an further 90 years added to all but the shortest lease, the premises will be worth the same as a freehold for decades to come.
| Lender | Requirement |
|---|---|
| Bank of Scotland | 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 30 years plus the term of the mortgage at the outset 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 conveyancing solicitor we work with provide it.
Andrew was the the leasehold proprietor of a studio flat in Canvey Island being marketed with a lease of a few days over 72 years outstanding. Andrew on an informal basis spoke with his landlord being a well known Bristol-based freehold company for a lease extension. The landlord was prepared to agree an extension on non-statutory terms taking the lease to 125 years on the basis of a rise in the rent to £125 per annum. No ground rent would be due on a lease extension were Andrew to invoke his statutory right. Andrew procured expert legal guidance and was able to make a more informed decision and handle with the matter and sell the property.
Last Summer we were approach by Mrs Leah Johnson , who completed a newly refurbished apartment in Canvey Island in August 2011. We are asked if we could approximate the price could be for a ninety year extension to my lease. Comparative premises in Canvey Island with 100 year plus lease were valued about £250,400. The mid-range amount of ground rent was £65 collected quarterly. The lease terminated in 2090. Given that there were 64 years remaining we calculated the premium to the freeholder to extend the lease to be between £19,000 and £22,000 plus expenses.
Mr and Mrs. R Brooks moved into a garden flat in Canvey Island in March 2007. The question was if we could estimate the price would likely be to extend the lease by ninety years. Identical residencies in Canvey Island with a long lease were in the region of £189,000. The average amount of ground rent was £55 invoiced yearly. The lease concluded in 2079. Having 53 years unexpired we calculated the premium to the landlord for the lease extension to be within £28,500 and £33,000 exclusive of legals.