Croydon leases on domestic deteriorating in value. Where your lease has in the region of 90 years remaining, you should start considering the need for a lease extension. An important point to note is that it is desirable for your lease extension to be in place before the term of the existing lease drops under 80 years - otherwise a higher premium will be due. Leasehold owners in Croydon will mostly be legally entitled to a lease extension; however It would be wise to check with a lawyer to confirm your eligibility. In certain situations you may not qualify. There are prescribed deadlines and steps to follow once the process has started so it’s wise to be guided by a lawyer during the process.
Leasehold properties in Croydon with more than one hundred years remaining on the lease are often regarded as a ‘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 reversionary interest unless savings on ground rent and maintenance charges justify 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; |
| 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. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 30 years plus the term of the mortgage at the outset of the mortgage. |
| Santander | If the property is leasehold, the remaining unexpired lease term at the end of the new mortgage term must be at least 50 years where any part of the mortgage is on Interest Only and 30 years if all loan parts are on Capital Repayment and Interest. You must report the unexpired lease term to us and await our instructions if:
|
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
Lease extensions in Croydon can be a difficult process. We recommend you procure guidance from a conveyancer and valuer with experience in lease extensions.
We provide you with an expert from a selection of lease extension solicitors, which ensures a targeted and efficient service as you have a dedicated port of call with an individual lawyer. Our lease extension solicitors have a wealth of experience dealing with Croydon lease extensions and further afield, as well as any potential issues which may arise as well as problems with the Leasehold Valuation Tribunal.
Two years ago Aiden, started to get near to the 80-year mark with the lease on his two bedroom flat in Croydon. In buying his flat two decades ago, the length of the lease was of minimal bearing. Fortunately, he noticed he would soon be paying way over the odds for a lease extension. Aiden extended the lease at the eleventh hour in July. Aiden and the freeholder subsequently settled on sum of £6,000 . If he had missed the deadline, the amount would have escalated by a minimum £875.
In 2012 we were contacted by Mr and Mrs. H Ward who, having owned a ground floor apartment in Croydon in October 1997. We are asked if we could estimate the premium could be for a ninety year lease extension. Similar premises in Croydon with a long lease were worth £257,800. The average amount of ground rent was £65 billed quarterly. The lease terminated on 19 April 2091. Given that there were 65 years outstanding we approximated the compensation to the freeholder for the lease extension to be between £18,100 and £20,800 not including costs.
An example of a Freehold Enfranchisement case 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 was in relation to 4 flats. The remaining number of years on the lease was 98 years.