Mortgage on a leasehold property

amyjay_2

Just looking for some advice.

We have had an offer accepted on our house and have put an offer in on the house we want to buy. This has now been accepted. We had an appointment with a mortgage advisor yesterday and all was fine, was ready to sign and hand over the fee until she asked whether it was freehold or leasehold. Anyway- it turns out Halifax won't give us a mortgage if there is less than 70 years left on the lease and u fortunately there's 64 years on the property we want!

And so- does anyone know any providers that would provide a mortgage with a lease of less than 70 years?

Thanks in advance for your help!

katejo

amyjay wrote: »

Just looking for some advice.

We have had an offer accepted on our house and have put an offer in on the house we want to buy. This has now been accepted. We had an appointment with a mortgage advisor yesterday and all was fine, was ready to sign and hand over the fee until she asked whether it was freehold or leasehold. Anyway- it turns out Halifax won't give us a mortgage if there is less than 70 years left on the lease and u fortunately there's 64 years on the property we want!

We have told the vendor and explained the situation and I think he may be worried we are going to pull out! As our current house is only in my partners name - I am classed as a first time
Buyer we were going to be getting some great discounts and now this isn't possible either. We have an appointment with a mortgage advisor on Tuesday to see what they say.

And so- does anyone know any providers that would provide a mortgage with a lease of less than 70 years?

Thanks in advance for your help!

Are you sure that you still want to but the house? As the number of years on the lease goes down, the more the value of the house drops. Does the asking price/your offer allow for the cost of you extending the lease. I hope i will not have to buy a leasehold property again but, if i did, I would not consider a property with under 85-90 years left.

Yorkie1

I would be surprised if you found many mortgage companies who will lend on a lease that short - anything under 70 years as a minimum will be dodgy. However, see what the broker has to say.

What the seller should be doing is to extend the lease before trying to sell it. Even if you do find a lender, you will not be able to start the process of extending it until you have been in situ for 2 years, so you would definitely want to get him to start the process off.

It would also be worth getting a value if possible for the extension if you had to do it after buying - this will impact on your budgeting.

amyjay_2

Thanks for the advice. Who would we need to speak to about getting it valued for the extension of the lease?

Richard_Webster

If it is a house the sellers should buy the freehold.

Why did you even consider buying it with such a short lease?

propertyman

You are very likely to find that the price you are paying is far more than it should be. Similar proprieties on long leases are worth more, as around 80 years, the values fall off a cliff. The average EA does not understand the distinction nor can assess the fall in value.

Here is an advice guide on purchasing the freehold, though the vendor should exercise the right and you in simple terms take it over at completion. http://www.lease-advice.org/publications/documents/document.asp?item=1

You immediate need is to get a copy of the lease and have a local chartered valuation surveyor value the property
1:on the existing lease length and
2: with freehold title

to establish the price that you should be paying as is and the likely cost to buy the freehold.

The estate agent acts for the vendor and the valuer for the lender acts primarily for them; you need your own local valuer;
search under leasehold enfranchisement
http://www.ricsfirms.com/vw/search/Specialisation.aspx

Good luck

kingstreet

If you discover there's a bargain to be had by buying with the short lease, here's the CML list of lenders and their minimum residual lease terms;-

http://www.cml.org.uk/cml/handbook/englandandwales/question-list/321