Fitzrovia leases on residential properties are gradually losing value. The shorter the remaining lease term becomes, the less it is worth – and accordingly any extension of the lease becomes more expensive. It is the case that most Fitzrovia tenants have the right to extend their lease by an additional ninety years by virtue of the 1993 Leasehold Reform Act. If you are a leasehold owner in Fitzrovia you should see if your lease has between seventy and 90 years left. There are compelling reasons why a Fitzrovia leaseholder with a lease having around 80 years unexpired should take action to ensure that a lease extension is put in place without delay
Leasehold residencies in Fitzrovia with in excess of 100 years outstanding on the lease are sometimes referred to as ‘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 purchasing the freehold unless savings on ground rent and maintenance charges merit it.
| 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. |
| 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. |
| National Westminster Bank | Mortgage term plus 30 years. For Shared Ownership, the remaining term of the lease must be at least 30 years plus the term of the mortgage at the outset of the mortgage. |
| Santander | If the property is leasehold, the remaining unexpired lease term at the end of the new mortgage term must be at least 50 years where any part of the mortgage is on Interest Only and 30 years if all loan parts are on Capital Repayment and Interest. You must report the unexpired lease term to us and await our instructions if:
|
| TSB | Minimum of 70 years at mortgage commencement, with 30 years remaining at mortgage redemption. |
Engaging our service will provide you increased control over the value of your Fitzrovia leasehold, as your property will be more valuable and saleable in terms of lease length should you want to sell. The lawyers that we work with are well versed in the legislation handling many hundreds of lease extensions or freehold purchase transactions.
Cameron owned a studio apartment in Fitzrovia being marketed with a lease of a little over 72 years left. Cameron informally contacted his freeholder a well known local-based freehold company for a lease extension. The landlord indicated a willingness to extend the lease to 125 years on the basis of an increased rent to £50 annually. No ground rent would be payable on a lease extension were Cameron to invoke his statutory right. Cameron procured expert legal guidance and was able to make a more informed decision and handle with the matter and ending up with a market value flat.
Last Autumn we were contacted by Mr Y Sánchez , who owned a purpose-built apartment in Fitzrovia in March 1997. We are asked if we could estimate the compensation to the landlord could be to extend the lease by an additional years. Identical flats in Fitzrovia with an extended lease were in the region of £270,000. The average ground rent payable was £55 invoiced quarterly. The lease ran out in 2102. Having 76 years left we calculated the premium to the freeholder for the lease extension to be within £9,500 and £11,000 not including legals.
An example of a Freehold Enfranchisement matter before the tribunal for a Fitzrovia property 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 was in relation to 1 flat. The unexpired term was 73.26 years.