The value of Fitzrovia leasehold residential property falls as the lease term becomes shorter and this will have an impact on its saleability. The cost of extending the lease can escalate significantly once the unexpired lease term is below than eighty years
Leasehold properties in Fitzrovia with more than 100 years outstanding on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your property. In such situations there is often little upside in purchasing the reversionary interest unless savings on ground rent and service charges warrant it.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Barnsley Building Society | 60 years from the date of the mortgage application subject to 35 years remaining at the end of the mortgage term. |
| 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. |
| Royal Bank of Scotland | Mortgage term plus 30 years. |
Regardless of whether you are a tenant or a landlord in Fitzrovia,the lease extension lawyers that we work with will always be happy to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with Fitzrovia valuers.
Toby owned a 2 bedroom flat in Fitzrovia on the market with a lease of fraction over 72 years outstanding. Toby on an informal basis approached his landlord being a well known local-based freehold company for a lease extension. The landlord was keen to give an extension on non-statutory terms taking the lease to 125 years subject to a rise in the rent to £100 yearly. No ground rent would be due on a lease extension were Toby to exercise his statutory right. Toby procured expert advice and was able to make an informed judgement and deal with the matter and readily saleable.
In 2009 we were phoned by Mr and Mrs. H Williams who, having acquired a first floor flat in Fitzrovia in January 2012. The question was if we could approximate the price could be to prolong the lease by 90 years. Comparable premises in Fitzrovia with an extended lease were worth £270,000. The average amount of ground rent was £55 billed every twelve months. The lease ended in 2100. Considering the 75 years as a residual term we estimated the compensation to the freeholder for the lease extension to be within £9,500 and £11,000 plus costs.
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 affected 1 flat. The unexpired residue of the current lease was 73.26 years.