There is no doubt about it a leasehold flat or house in Croydon is a wasting asset as a result of the diminishing lease term. Where the residual term has, more than one hundred years to run then this decrease may be of little impact nevertheless there will become a point in time when a lease has under than 80 years unexpired as part of the premium you will incur is what is known as a marriage value. This could be significant. It is the main reason why you should extend the lease sooner than later. Many flat owners in Croydon will meet the qualifying criteria; nevertheless a conveyancer can advise if you are eligible to extend your lease. In limited situations you may not qualify, the most common reason being that you have not been the owner of the property for two years.
Leasehold premises 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 circumstances there is often little to be gained by buying the freehold unless savings on ground rent and estate charges warrant it.
| Lender | Requirement |
|---|---|
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage are not acceptable. 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; |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| Godiva Mortgages | 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. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Retaining our service gives you better control over the value of your Croydon leasehold, as your property will be more valuable and saleable in relation to the lease length should you want to sell. The conveyancers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Last October Joseph, came very near to the 80-year mark with the lease on his garden flat in Croydon. Having bought his flat 18 years previously, the lease term was of no bearing. by good luck, he noticed he needed to take steps soon on a lease extension. Joseph extended the lease at the eleventh hour last January. Joseph and the landlord eventually agreed on a premium of £6,000 . If he failed to meet the deadline, the price would have increased by a minimum £950.
In 2009 we were e-mailed by Dr F Hernández who, having moved into a one bedroom apartment in Croydon in June 1997. The dilemma was if we could approximate the price would be to extend the lease by 90 years. Comparative properties in Croydon with 100 year plus lease were worth £285,000. The mid-range ground rent payable was £45 billed monthly. The lease ended on 10 October 2097. Considering the 71 years outstanding we approximated the premium to the landlord to extend the lease to be between £12,400 and £14,200 plus fees.
An example of a Freehold Enfranchisement case 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 remaining number of years on the lease was 98 years.