Owning a flat usually means owning a lease of the property, which has a finite term of years. your lease will ordinarily be granted for a set period of time , ordinarily 99 or 125 years, although we have seen longer and shorter terms in Canary Wharf. Inevitably, the period of lease remaining shortens as time goes by. This is often overlooked and only becomes a problem when the flat or house needs to be sold or refinanced. The shorter the lease the lower the value of the property and the more it will cost to procure a lease extension. Qualifying long lease owners in Canary Wharf have the legal entitlement to extend the lease for an additional ninety years under legislation. You should give careful consideration before putting off your Canary Wharf lease extension. Putting off that expense now likely increases the price you will eventually have to pay to extend your lease
It is conventional wisdom that a property with in excess of 100 years remaining is worth roughly the equivalent as a freehold. Where an additional ninety years added to all but the shortest lease, the property will be equivalent in value to a freehold for many years in the future.
| Lender | Requirement |
|---|---|
| Accord Mortgages | 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. |
| 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. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
| 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. |
The conveyancers that we work with procure Canary Wharf 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 conveyancer we work with provide it.
After unsuccessful correspondence with the freeholder of her leasehold flat in Canary Wharf, Harriet commenced the lease extension process as the eighty year deadline was quickly approaching. The lease extension completed in April 2014. The landlord’s fees were kept to an absolute minimum.
Mr M Lefèvre bought a garden flat in Canary Wharf in July 1997. We are asked if we could shed any light on how much (approximately) premium could be to prolong the lease by ninety years. Identical flats in Canary Wharf with a long lease were in the region of £295,000. The mid-range ground rent payable was £50 billed per annum. The lease lapsed on 14 August 2100. Having 75 years unexpired we estimated the compensation to the freeholder for the lease extension to be between £8,600 and £9,800 plus professional charges.
An example of a Freehold Enfranchisement case for a Canary Wharf flat is 12, 14 & 16 Hull Close in May 2010. the Tribunal determined that the premium payable for the acquisition of the freehold to the subject premises was the sum of £18,300 This case was in relation to 3 flats. The unexpired term as at the valuation date was 101.61 years.