Unfortunately that a Fitzrovia residential lease is a deteriorating asset. As the lease term reduces so does the value of the property. The extent of this is taken for granted in the first few years due to the deflation being disguised by increases in the Fitzrovia property prices.Where your lease has approximately ninety years left, you should start considering a lease extension. If lease term slips under eighty years, you will end up paying 50% of the property's 'marriage value' on top of the usual cost of the lease extension to the landlord. Marriage value is the amount of extra value that a lease extension will add the property The majority of leasehold owners in Fitzrovia will be able to extend under the legislation; however a conveyancing solicitor will be able to clarify whether you are eligibility. In some cases you may not qualify. There are also strict deadlines and procedures to be adhered to once the process has commenced and you will need to be guided by your conveyancer from beginning to end of the formalities.
Leasehold properties in Fitzrovia with more than one hundred years left on the lease are sometimes regarded as a ‘virtual freehold’. This is where the lease value the same as a freehold interest in your home. In such situations there is often little upside in buying the reversionary interest unless savings on ground rent and maintenance charges merit it.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Lloyds TSB Scotland | Minimum 70 years from the date 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 |
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
The conveyancing solicitors that we work with undertake 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.
Jamie was the the leasehold owner of a 2 bedroom apartment in Fitzrovia being marketed with a lease of fraction over 61 years remaining. Jamie informally approached his freeholder a well known Manchester-based freehold company for a lease extension. The freeholder indicated a willingness to grant an extension taking the lease to 125 years subject to a new rent initially set at £150 per annum and increase every twenty five years thereafter. No ground rent would be payable on a lease extension were Jamie to invoke his statutory right. Jamie procured expert advice and secured satisfactory resolution without resorting to tribunal and ending up with a market value flat.
Last May we were phoned by Mr and Mrs. T Bennett , who completed a one bedroom flat in Fitzrovia in February 2011. We are asked if we could estimate the compensation to the landlord would be for a ninety year extension to my lease. Comparable homes in Fitzrovia with a long lease were valued about £210,600. The average amount of ground rent was £45 invoiced annually. The lease ended on 24 March 2088. Taking into account 62 years left we calculated the compensation to the landlord for the lease extension to be within £18,100 and £20,800 not including professional charges.
An example of a Freehold Enfranchisement matter before the tribunal 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 lease term was 73.26 years.