Unfortunately that a Fitzrovia residential lease is a deteriorating asset. As the lease term diminishes so does the value of the property. The extent of this is taken for granted in the first few years due to the loss of value being disguised by increases in the Fitzrovia property market.Where your lease has approximately 90 years left, you should start thinking about a lease extension. An important point to note is that it is desirable for lease extension to take place before the term of the existing lease dips below eighty years - otherwise a higher amount will be payable. Most leasehold owners in Fitzrovia will be able to extend under the legislation; however a lawyer will be able to confirm whether you are eligibility. In some situations you may not qualify. There are also strict timeframes and procedures to be adhered to once the process has commenced and you will need to be guided by your lawyer for the duration of the formalities.
It is generally considered that a residential leasehold with over one hundred years remaining is worth roughly the same as a freehold. Where an further 90 years added to all but the shortest lease, the property will be equivalent in value to a freehold for decades to come.
| Lender | Requirement |
|---|---|
| Accord Mortgages | 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. |
| Halifax | Minimum 70 years from the date of the mortgage. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 75 years plus the term of the mortgage at the outset of the mortgage. |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
| 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 Fitzrovia,the lease extension solicitors that we work with will always be prepared to discuss any residential leasehold matters and offer you the benefit of their experience and the close ties they enjoy with Fitzrovia valuers.
During the course of the last few months Nathan, started to get near to the eighty-year threshold with the lease on his one bedroom flat in Fitzrovia. In buying his property twenty years ago, the lease term was of no bearing. Fortunately, he noticed he would soon be paying an escalated premium for Extending the lease. Nathan extended the lease just in the nick of time in July. Nathan and the landlord who owned the flat above ultimately agreed on an amount of £6,000 . If the lease had dropped below eighty years, the amount would have become more exhorbitant by at least £975.
In 2009 we were e-mailed by Mr and Mrs. S Ali who, having bought a first floor apartment in Fitzrovia in October 2005. The dilemma was if we could shed any light on how much (roughly) compensation to the landlord could be for a 90 year lease extension. Similar premises in Fitzrovia with an extended lease were valued about £250,000. The mid-range ground rent payable was £50 collected monthly. The lease expired on 14 October 2096. Given that there were 70 years remaining we estimated the compensation to the freeholder to extend the lease to be between £9,500 and £11,000 exclusive of expenses.
An example of a Freehold Enfranchisement case for a Fitzrovia premises 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 term was 73.26 years.