East Croydon leases on residential properties are gradually losing 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. Most owners of residential leasehold property in East Croydon enjoy rights under legislation to extend the terms of their leases. If you are a leasehold owner in East Croydon you really ought to see if your lease has between 70 and ninety years left. There are good reasons why a East Croydon leaseholder with a lease having around 80 years unexpired should take action to ensure that a lease extension is actioned without delay
It is conventional wisdom that a property with over one hundred years unexpired lease term is worth approximately the equivalent as a freehold. Where an additional ninety years added to all but the shortest lease, the property will be worth the same as a freehold for decades to come.
| 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; |
| 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. |
| 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. |
| 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 |
| Yorkshire 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. |
Regardless of whether you are a tenant or a freeholder in East Croydon,the lease extension experts that we work with will always be willing to discuss any residential leasehold matters and offer you the benefit of their in-depth market knowledge and the close ties they enjoy with East Croydon valuers.
After lengthy correspondence with the landlord of her leasehold flat in East Croydon, Sophie started the lease extension process as the 80 year threshold was rapidly nearing. The legal work was finalised in September 2010. The freeholder’s charges were kept to an absolute minimum.
In 2012 we were contacted by Dr B García who, having bought a one bedroom flat in East Croydon in January 2011. The question was if we could estimate the price would likely be for a 90 year extension to my lease. Similar flats in East Croydon with a long lease were in the region of £235,600. The average amount of ground rent was £60 collected every twelve months. The lease ran out in 2088. Given that there were 62 years unexpired we calculated the premium to the landlord to extend the lease to be within £21,900 and £25,200 exclusive of expenses.
An example of a Freehold Enfranchisement case for a East 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 affected 4 flats. The unexpired term was 98 years.