The market value of a leasehold property in Canning Town is impacted by how long the lease has left to run. If it is near to or less than 80 years you should envisage difficulties on re-sale, so it is advisable to arrange for a lease extension before buying. It is preferable to commence the lease extension process when the lease still has 82 years to run so that a lease extension can be addressed well before the 80 year threshold. Statute enables Canning Town qualifying lessees to a 90 year extension added to their unexpired lease term (ie if your lease has 50 years remaining the statutory lease extension will provide a new term of 140 years). The purpose of the valuation is to determine the premium payable by the lessee to the freeholder for the purchase of the lease extension.
It is conventional wisdom that a property with in excess of one hundred years unexpired lease term is worth roughly the same as a freehold. Where an further ninety years added to any lease with more than 30 years left, the premises 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| 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. |
Using our service gives you enhanced control over the value of your Canning Town leasehold, as your property will be more valuable and marketable in terms of lease length should you wish to sell. The lawyers that we work with have a in-depth market knowledge handling many hundreds of lease extensions or freehold purchase transactions.
18 months ago Stanley, came dangerously close to the 80-year threshold with the lease on his one bedroom apartment in Canning Town. Having bought his home two decades ago, the length of the lease was of little importance. Fortunately, he realised he would soon be paying way over the odds for a lease extension. Stanley arranged for a lease extension just ahead of time in May. Stanley and the freeholder subsequently settled on sum of £5,500 . If he failed to meet the deadline, the amount would have become more exhorbitant by at least £875.
Mr Sebastian King bought a one bedroom apartment in Canning Town in April 2006. We are asked if we could estimate the price could be to extend the lease by ninety years. Identical flats in Canning Town with a long lease were valued about £280,000. The average ground rent payable was £55 billed per annum. The lease terminated on 14 November 2104. Considering the 78 years outstanding we estimated the premium to the landlord for the lease extension to be within £13,300 and £15,400 not including legals.
An example of a Lease Extension decision for a Canning Town premises is 46 Credon Road in January 2014. On 11 September 2013 Deputy District Judge Price sitting at the Bow County Court made a vesting order that the freeholder surrender his lease and be granted a new lease of the Premises on such terms as may be determined by the First Tier Tribunal (Property Chamber).The appropriate sum as concluded by the Tribunal was £7225 This case was in relation to 1 flat. The unexpired term as at the valuation date was 69.77 years.