The market value of a leasehold property in Croydon is impacted by how many years the lease has left to run. If it is near to or fewer than 80 years you should envisage difficulties on re-sale, so it is advisable to arrange for the lease to be extended prior to purchasing. It is preferable to start the lease extension process when the lease still has 82 years to run so that formalities can be addressed prior to the eighty year cut off point. Current legislation enables Croydon qualifying lessees to obtain a new lease which will be for the current unexpired lease term plus an additional term of 90 years. The purpose of the valuation is to arrive at an opinion of the sum payable by the lessee to the freeholder for the acquisition of the lease extension.
Leasehold premises in Croydon with more than 100 years remaining on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your home. In such circumstances there is often little upside in buying the freehold unless savings on ground rent and service charges merit it.
| Lender | Requirement |
|---|---|
| Halifax | Minimum 70 years from the date of the mortgage. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
| 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. |
Lease extensions in Croydon can be a difficult process. We recommend you obtain guidance from a conveyancer and valuer with experience in this area.
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 in-depth market knowledge procuring Croydon lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
Kian owned a studio flat in Croydon being marketed with a lease of a few days over 61 years left. Kian on an informal basis spoke with his landlord being a well known Bristol-based freehold company and enquired on a premium to extend the lease. The landlord was prepared to agree an extension on non-statutory terms taking the lease to 125 years on the basis of an increased rent to £200 annually. Ordinarily, ground rent would not be payable on a lease extension were Kian to invoke his statutory right. Kian obtained expert advice and secured satisfactory deal informally and readily saleable.
Last Summer we were contacted by Mr O Sánchez , who completed a one bedroom apartment in Croydon in January 1995. We are asked if we could approximate the premium would likely be to extend the lease by an additional years. Identical residencies in Croydon with a long lease were in the region of £189,000. The average ground rent payable was £55 collected monthly. The lease expiry date was on 4 August 2078. Considering the 53 years remaining we estimated the premium to the freeholder for the lease extension to be between £28,500 and £33,000 not including legals.
An example of a Freehold Enfranchisement decision for a Croydon property is 29 Woodstock Road in April 2014. the Tribunal determined that the premiums to be paid into court in respect of the purchase of the freehold registered at HMLR under Title N0.SY3997 should be £7,217. This case affected 4 flats. The unexpired lease term was 98 years.