The basic rule is, all other factors being equal, the shorter the lease the more expensive the premium. Qualifying leaseholders in Croydon may extend the lease for a further 90 years in accordance with statute. Please give careful consideration before delaying your Croydon lease extension. Putting off that expense today simply escalates the amount you will eventually have to pay for a lease extension.
It is conventional wisdom that a residential leasehold with more than one hundred years remaining is worth roughly the equivalent as a freehold. Where an further 90 years added to all but the shortest lease, the property will be equivalent in value to a freehold for decades to come.
| 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. |
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage should be declined (see exception below). Leases with greater than 70 years but fewer than 85 years remaining must be referred to issuing office. Leases with fewer than 70 years should only be referred to the issuing office where the following scenario applies, as discretion may be applied subject to bank approval: • Property is located in any of the following prestigious developments: Cadogan, Crown, Grosvenor, Howard de Walden, Portman or Wellcome Trust Estates in Central London AND • The value of the property subject to the short remaining term is £500,000 or more AND • The loan to value does not exceed 90% for purchases, 90% like for like re-mortgages, 80% for re-mortgages with any element of capital raising and 80% for existing Barclays mortgage borrowers applying for additional borrowing; |
| Lloyds TSB Scotland | 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. |
The lawyers that we work with handle Croydon 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 conveyancing solicitor we work with provide it.
During the course of the last few months Dexter, came perilously close to the 80-year threshold with the lease on his leasehold apartment in Croydon. Having purchased his property 19 years previously, the unexpired term was of little bearing. As luck would have it, he recognised he would imminently be paying an inflated amount for Extending the lease. Dexter extended the lease just in the nick of time last January. Dexter and the freeholder via the managing agents subsequently agreed on a premium of £5,500 . If he failed to meet the deadline, the price would have increased by at least £1,150.
Dr G Reed purchased a recently refurbished flat in Croydon in July 2003. We are asked if we could estimate the compensation to the landlord would likely be for a 90 year lease extension. Comparable flats in Croydon with an extended lease were valued about £295,000. The mid-range amount of ground rent was £45 invoiced yearly. The lease expired in 2099. Having 74 years unexpired we approximated the compensation to the freeholder for the lease extension to be between £8,600 and £9,800 exclusive of fees.
An example of a Freehold Enfranchisement case for a Croydon residence 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 number of years remaining on the existing lease(s) was 98 years.