With a residential leasehold premises in Fitzrovia, you are in fact renting it for a certain amount of time. These days flat leases typically tend to be for 99 years or 125. Many leasehold owners are unconcerned as this seems like a lengthy period of time, you should think about extending the lease sooner rather than later. Accepted thinking is that the shorter the number of years is the cost of extending the lease becomes disproportionately greater especially once there are less than eighty years left. Residents in Fitzrovia with a lease drawing near to 81 years remaining should seriously consider extending it sooner than later. Once the lease term has below eighty years outstanding, under the current Act the freeholder can calculate and levy a larger premium, based on a technical calculation, strangely termed as “marriage value” which is payable.
Leasehold properties in Fitzrovia with more than one hundred years remaining 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 circumstances there is often little to be gained by purchasing the freehold unless savings on ground rent and service charges merit it.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage should be declined (see exception below). Leases with greater than 70 years but fewer than 85 years remaining must be referred to issuing office. Leases with fewer than 70 years should only be referred to the issuing office where the following scenario applies, as discretion may be applied subject to bank approval: • Property is located in any of the following prestigious developments: Cadogan, Crown, Grosvenor, Howard de Walden, Portman or Wellcome Trust Estates in Central London AND • The value of the property subject to the short remaining term is £500,000 or more AND • The loan to value does not exceed 90% for purchases, 90% like for like re-mortgages, 80% for re-mortgages with any element of capital raising and 80% for existing Barclays mortgage borrowers applying for additional borrowing; |
| National Westminster Bank | Mortgage term plus 30 years. |
| 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 |
| Virgin | 85 years at the time of completion. If it's less, we require it to be extended on or before completion. |
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.
During the course of the last few months Eli, came critically close to the eighty-year mark with the lease on his first floor flat in Fitzrovia. In buying his flat twenty years previously, the lease term was of no bearing. Fortunately, he recognised he would imminently be paying an inflated amount for Extending the lease. Eli arranged for a lease extension at the eleventh hour in April. Eli and the landlord who owned the flat above in the end agreed on the final figure of £5,000 . If the lease had gone lower than eighty years, the sum would have increased by at least £850.
In 2009 we were contacted by Mr and Mrs. C Nelson who, having completed a ground floor apartment in Fitzrovia in January 2010. We are asked if we could shed any light on how much (roughly) price could be to extend the lease by an additional years. Identical flats in Fitzrovia with an extended lease were in the region of £246,800. The mid-range ground rent payable was £60 collected quarterly. The lease came to a finish on 11 April 2075. Having 50 years unexpired we estimated the compensation to the landlord to extend the lease to be within £44,700 and £51,600 exclusive of fees.
An example of a Freehold Enfranchisement matter before the tribunal 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 lease term was 73.26 years.