The nearer a residential lease in Fitzrovia nears to zero years unexpired, the the greater the reduction in the value of the property. Where the residual term has, in excess of 125 years remaining then this decrease may be negligible however there will become a stage when a lease has fewer than 80 years remaining as part of the premium you will incur is what is known as a marriage value. This could increase markedly the cost. It is the primary logic behind why you should extend the lease sooner rather than later. Many flat owners in Fitzrovia will qualify for this right; however a conveyancer will be able to confirm if you qualify to extend your lease. In limited situations you may not qualify, the most common reason being that you have owned the property for less than two years.
Leasehold premises in Fitzrovia with over one hundred years left on the lease are often referred to as ‘virtual freehold’. This is where the lease is worth the same as a freehold interest in your property. In such situations there is often little upside in purchasing the freehold unless savings on ground rent and estate charges justify it.
| Lender | Requirement |
|---|---|
| Coventry Building Society | |
| National Westminster Bank | |
| Santander | |
| TSB | |
| Royal Bank of Scotland |
The lawyers that we work with procure 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 conveyancing solicitor we work with provide it.
16 months ago Archie, started to get close to the 80-year threshold with the lease on his studio apartment in Fitzrovia. In buying his property two decades ago, the length of the lease was of minimal significance. Luckily, it dawned on him that he would soon be paying an inflated amount for a lease extension. Archie extended the lease just in the nick of time in July. Archie and the freeholder via the management company in the end settled on a premium of £5,500 . If the lease had fallen below 80 years, the figure would have escalated by a minimum £1,125.
Last Summer we were called by Dr Sarah Reed , who took over the lease of a one bedroom flat in Fitzrovia in July 2012. We are asked if we could estimate the compensation to the landlord would likely be for a 90 year lease extension. Identical properties in Fitzrovia with a long lease were valued about £227,800. The average amount of ground rent was £45 billed annually. The lease elapsed in 2091. Taking into account 65 years unexpired we approximated the premium to the landlord for the lease extension to be within £13,300 and £15,400 plus costs.
An example of a Freehold Enfranchisement case for a Fitzrovia residence 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 number of years remaining on the existing lease(s) was 73.26 years.