It’s an underpublicised truth that a Croydon residential lease is a deteriorating asset. The lease value reduces in proportion to its lease length. The extent of this is taken for granted in the early years due to the loss of value being disguised by increases in the Croydon property market.Where your lease has approximately ninety years left, you should start thinking about a lease extension. If the number of years remaining falls under 80 years, you will end up paying 50% of the property's 'marriage value' on top of the usual cost of the lease extension to the landlord. The marriage fee is the amount of extra value that a lease extension will add the property Most leasehold owners in Croydon will be able to extend under the legislation; however a conveyancing solicitor will be able to confirm whether you are eligibility. In some cases you may not qualify. There are also strict timetables and procedures to be adhered to once the process has commenced and you will need to be guided by your lawyer from beginning to end of the formalities.
Leasehold premises in Croydon with more than one hundred years left on the lease are often regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your home. In such situations there is often little upside in buying the freehold unless savings on ground rent and estate charges merit it.
|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.|
|Barclays plc||Mortgage term plus 25 years provided that leases of less than 85 years are be referred to us for approval.|
|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.|
|Skipton Building Society|| 85 years from the date of completion of the mortgage|
For Buy to Let cases:
- lettings must not breach any of the lessee’s covenants; and
- consent of the lessor to lettings must be obtained if necessary
|Royal Bank of Scotland||Mortgage term plus 30 years. For a Lifetime Mortgage, the term must be no less than 150 years minus the age of the Borrower.|
Engaging our service gives you better control over the value of your Croydon leasehold, as your property will be more valuable and saleable in terms of lease length should you want to sell. The conveyancing solicitors that we work with have a wealth of experience of handling many hundreds of lease extensions or freehold purchase transactions.
In recent months James, started to get close to the eighty-year mark with the lease on his one bedroom apartment in Croydon. In buying his property 18 years previously, the unexpired term was of no bearing. Fortunately, he recognised he would imminently be paying an inflated amount for a lease extension. James extended the lease at the eleventh hour last June. James and the freeholder in the end agreed on the final figure of £6,000 . If he failed to meet the deadline, the sum would have gone up by a minimum £1,150.
Last Christmas we were phoned by Mr and Mrs. Y Evans , who was assigned a lease of a purpose-built apartment in Croydon in June 2005. The dilemma was if we could shed any light on how much (roughly) premium would be for a 90 year lease extension. Similar premises in Croydon with a long lease were in the region of £205,000. The mid-range amount of ground rent was £50 invoiced yearly. The lease elapsed on 5 March 2099. Having 78 years remaining we approximated the premium to the freeholder for the lease extension to be within £7,600 and £8,800 plus legals.
An example of a Freehold Enfranchisement case 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 related to 4 flats. The unexpired term was 98 years.