Croydon leases on residential properties are gradually diminishing in value. The shorter the remaining lease term becomes, the less it is worth – and accordingly any extension of the lease becomes more expensive. Legislation has been in place for sometime now allowing qualifying Croydon residential leaseholders to extend the terms of long leases. Where you are a leasehold owner in Croydon you should see if your lease has between 70 and ninety years remaining. In particular once the remaining lease term slips under 80 years, the amount payable for any lease extension sharply increases as an element of the premium you pay is what is known as a marriage value
It is generally considered that a property with in excess of one hundred years remaining is worth roughly the equivalent as a freehold. Where an additional ninety years added to any lease with more than 35 years left, the residence will be equivalent in value to a freehold for decades to come.
| Lender | Requirement |
|---|---|
| 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. |
| 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. |
| National Westminster Bank | Mortgage term plus 30 years. |
| Santander | You must report the unexpired lease term to us and await our instructions if: 1. the unexpired term assumed by our valuer is between 55 and 82 years, but the actual unexpired term differs by more than one year (whether longer or shorter); or 2. the unexpired term assumed by our valuer is more than 82 years but the actual unexpired term is less than 82 years; or 3. no valuation report is provided However, we will not accept a lease where on expiry of the mortgage: (i) less than 50 years remain and all or part of the loan is repaid on an interest-only basis: or (ii) less than 30 years remain and the loan is repaid on a capital and interest basis We will accept a lease that has been extended under the provisions of the Leasehold Reform Act 1993 provided statutory compensation would be available to the leaseholder. |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
The conveyancers that we work with procure 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.
In the wake of 6 months of lengthy discussions with the landlord of her ground floor apartment in Croydon, Rebecca initiated the lease extension process just as her lease was nearing the all-important eighty-year mark. The transaction was finalised in March 2005. The freeholder’s costs were kept to an absolute minimum.
Last Spring we were called by Dr Joshua Campbell , who owned a newly refurbished flat in Croydon in May 2008. We are asked if we could estimate the premium would likely be to extend the lease by 90 years. Comparable flats in Croydon with a long lease were valued about £260,200. The mid-range ground rent payable was £65 invoiced yearly. The lease expired in 2091. Given that there were 66 years left we calculated the premium to the freeholder to extend the lease to be between £15,200 and £17,600 exclusive of professional charges.
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 unexpired term as at the valuation date was 98 years.