The re-sale value of a leasehold property in Croydon depends on how long the lease has remaining. If it is close to or less than 80 years you should foresee problems on re-sale, so it is advisable to arrange for a lease extension ahead of buying. It is preferable to start the process of extending the lease is when the lease still has 82 years remaining so that formalities can be addressed ahead of the eighty year threshold. Current legislation enables Croydon qualifying lessees to obtain a lease extension of 90 years on top of the remaining length of the lease at a peppercorn rent (that is, rent free). 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 over one hundred years remaining on the lease are sometimes referred to as ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your property. In such circumstances there is often little upside in buying the freehold unless savings on ground rent and estate charges warrant it.
| Lender | Requirement |
|---|---|
| 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. |
| 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 |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
Engaging our service gives you increased control over the value of your Croydon leasehold, as your property will be more valuable and marketable in terms of lease length should you decide to sell. The lawyers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Noah was the the leasehold owner of a studio flat in Croydon being marketed with a lease of a little over 61 years outstanding. Noah informally contacted his freeholder being a well known Bristol-based freehold company for a lease extension. The landlord indicated a willingness to extend the lease to 125 years on the basis of a new rent to start with set at £100 per annum and increase every twenty five years thereafter. Ordinarily, ground rent would not be payable on a lease extension were Noah to invoke his statutory right. Noah obtained expert advice and secured satisfactory deal informally and ending up with a market value flat.
Ms Hollie Morris moved into a studio apartment in Croydon in August 1997. We are asked if we could estimate the price would likely be for a ninety year extension to my lease. Similar premises in Croydon with 100 year plus lease were in the region of £280,000. The mid-range amount of ground rent was £45 invoiced yearly. The lease came to a finish on 10 August 2095. Having 70 years remaining we approximated the compensation to the freeholder to extend the lease to be within £12,400 and £14,200 not including fees.
An example of a Freehold Enfranchisement matter before the tribunal for a Croydon premises 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 remaining number of years on the lease was 98 years.