When it comes to domestic leasehold property in Fitzrovia, you are actually buying a right to live in a property for a prescribed time frame. These days flat leases typically tend to be for 99 years or 125. Even though this may appear like a lengthy period of time, you should consider a lease extension sooner rather than later. The general rule is that the shorter the lease is the cost of extending the lease increases markedly particularly once there are less than eighty years left. Anyone in Fitzrovia with a lease nearing 81 years remaining should seriously consider extending it as soon as possible. Once a lease has fewer than 80 years outstanding, under the current Act the freeholder is entitled to calculate and demand a greater amount, assessed on a technical multiplication, known as “marriage value” which is due.
Leasehold properties in Fitzrovia with more than one hundred years remaining on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your premises. In such circumstances there is often little upside in purchasing the freehold unless savings on ground rent and service charges merit it.
| Lender | Requirement |
|---|---|
| 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. |
| Leeds Building Society | 85 years remaining from the start of the mortgage. |
| 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. |
| 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 |
The conveyancers that we work with handle Fitzrovia 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 conveyancer we work with provide it.
Felix was the the leasehold proprietor of a high value flat in Fitzrovia being marketed with a lease of fraction over 72 years unexpired. Felix informally approached his landlord a well known local-based freehold company for a lease extension. The landlord was keen 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 due on a lease extension were Felix to exercise his statutory right. Felix obtained expert advice and was able to make a more informed decision and handle with the matter and sell the property.
In 2010 we were phoned by Dr G Edwards who, having moved into a garden flat in Fitzrovia in April 2007. We are asked if we could shed any light on how much (roughly) premium would likely be for a 90 year extension to my lease. Comparable properties in Fitzrovia with an extended lease were in the region of £220,400. The mid-range amount of ground rent was £45 invoiced yearly. The lease finished in 2088. Considering the 64 years remaining we approximated the compensation to the landlord to extend the lease to be within £16,200 and £18,600 plus expenses.
An example of a Freehold Enfranchisement decision for a Fitzrovia flat is 20 Avonwick Road in July 2013. The Tribunal was dealing with an application under Section 26 of the Leasehold Reform Housing and Urban Development Act 1993 for a determination of the freehold value of the property. It was concluded that the price to be paid was Fifteen Thousand Nine Hundred and Seventy (£15,970) divided as to £8,200 for Flat 20 and £7,770 for Flat 20A This case related to 1 flat. The unexpired term as at the valuation date was 73.26 years.