Croydon leases on residential properties are gradually diminishing in value. The shorter the remaining lease term becomes, the less it is worth – and as a result 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 check if your lease has between seventy and 90 years left. There are good reasons why a Croydon flat owner with a lease having around eighty years unexpired should take steps to ensure that a lease extension is put in place without delay
It is conventional wisdom that a property with more than one hundred years unexpired lease term is worth roughly the same as a freehold. Where an further ninety years added to any lease with more than 30 years left, the property will be worth the same as a freehold for many years ahead.
| 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. |
| 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. |
| 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 |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
The conveyancing solicitors 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 lawyer we work with provide it.
Aiden was the the leasehold owner of a high value flat in Croydon on the market with a lease of a few days over 61 years unexpired. Aiden informally contacted his landlord being a well known Manchester-based freehold company and enquired on a premium to extend the lease. The freeholder was prepared to grant an extension on non-statutory terms taking the lease to 125 years subject to a new rent to start with set at £200 per annum and increase every 25 years thereafter. Ordinarily, ground rent would not be payable on a lease extension were Aiden to invoke his statutory right. Aiden obtained expert legal guidance and secured an acceptable resolution without resorting to tribunal and sell the flat.
Last Winter we were e-mailed by Dr K Nguyen , who acquired a purpose-built flat in Croydon in May 2012. We are asked if we could shed any light on how much (roughly) price would be for a ninety year lease extension. Identical premises in Croydon with 100 year plus lease were worth £257,800. The average ground rent payable was £65 invoiced monthly. The lease finished on 20 February 2090. Given that there were 65 years remaining we estimated the compensation to the landlord to extend the lease to be between £17,100 and £19,800 plus professional charges.
An example of a Freehold Enfranchisement case for a Croydon property 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 residue of the current lease was 98 years.