Croydon leases on residential properties are gradually losing value. The shorter the remaining lease term becomes, the less it is worth – and as a result any extension of your lease gets more expensive. The majority of owners of residential leasehold property in Croydon enjoy rights under legislation to extend the terms of their leases. If you are a leasehold owner in Croydon you would be well advised to check if your lease has between 70 and 90 years left. There are good reasons why a Croydon leaseholder with a lease having around eighty years left should take steps to ensure that a lease extension is actioned without delay
Leasehold residencies in Croydon with over one hundred years outstanding on the lease are often referred to as ‘virtual freehold’. This is where the lease value the same as a freehold interest in your premises. In such situations there is often little to be gained by buying the freehold unless savings on ground rent and maintenance charges merit it.
| 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. |
| 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. |
Retaining our service will provide you enhanced control over the value of your Croydon leasehold, as your property will be more valuable and marketable in relation to the lease length should you wish to sell. The lawyers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
18 months ago John, came perilously close to the 80-year threshold with the lease on his two bedroom flat in Croydon. Having purchased his property 19 years ago, the lease term was of minimal bearing. As luck would have it, he noticed he needed to take steps soon on a lease extension. John arranged for a lease extension just in the nick of time last August. John and the landlord ultimately agreed on sum of £5,500 . If the lease had gone lower than 80 years, the figure would have increased by a minimum £875.
Dr Edward White purchased a ground floor flat in Croydon in July 2004. The dilemma was if we could estimate the compensation to the landlord would be for a 90 year lease extension. Similar residencies in Croydon with 100 year plus lease were worth £205,000. The average amount of ground rent was £50 billed per annum. The lease elapsed in 2103. Taking into account 78 years left we approximated the compensation to the freeholder for the lease extension to be within £8,600 and £9,800 exclusive of professional charges.
An example of a Freehold Enfranchisement matter before the tribunal for a Croydon flat 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 was in relation to 4 flats. The number of years remaining on the existing lease(s) was 98 years.