Mortgage and Possessory title question

MAFERGAL

I've had this post in the mortgage section for a few days with lots of views but no replies so I'm hoping someone on here has an answer/experience of this situation -
Hi everyone, wondered if you can help. I got a letter from my solicitor today with regards to the land registry for the property I'm in the process of purchasing.
It says there are 2 title numbers, 1 has an Absolute Title and 1 has a Possessory Title. The PT relates to basically what is the driveway to the left of the property and a small strip of land behind it. The garage, it would appear is built over both parts, land that has PT and AT.
My solicitor has written back to the Vendors solicitors Re. the circumstances of the PT and an indemnity etc.
The one bit that concerns me is that my solicitor obviously said they would have to inform my lender of this and the responses to their queries, which I totally understand. Is this likely to hinder my mortgage offer though or affect it? That is what I'm most worried about.
More info if it helps answer, the vendor has owned the property for 6 years, prior to that I believe it was owned for 40yrs+. I've researched the internet and think I understand what a PT is and that possibly the worse case scenario is that we apply for an AT in 6 years time. But I can't find anything relating to mortgage applications. Thank you

david29dpo

The lender will be concerned due to the possibility of the asset reducing in value. How big is your loan to value?
The only thing you can do is wait for a reply from them.

anggrrr

I recently bought a house that was under possessory title as the deeds were lost. My mortgage company (well, their underwriters) wanted a) and indemnity insurance in place to cover a claim on the property/land and b) to see the evidence that was presented to the land registry to grant possessory title. Once they were satisfied the offer stayed the same and it went through without a hitch.

Richard_Webster

Unlikely to be a problem - lenders usually accept possessory titles in such cases if supported by indemnity insurance.

MAFERGAL

Thank you for the replies. That's made me feel a bit better. LTV is 70% and as I mentioned my solicitor did mention an indemnity etc. Any idea how mutch that would cost? I'd estimate that the land in question is no bigger than 12 square metres.

anggrrr

It depends on the local property value but mine was under £50 and the vendor paid it.
EDIT to add: it's a lifetime policy.

DVardysShadow

MAFERGAL wrote: »

Thank you for the replies. That's made me feel a bit better. LTV is 70% and as I mentioned my solicitor did mention an indemnity etc. Any idea how mutch that would cost? I'd estimate that the land in question is no bigger than 12 square metres.

The area is not the issue. It is the potential loss of value. As I read it, you would lose a garage .

Having said that, the indemnity insurance will not be too expensive. If the seller did not make the issue clear to you before you offered, I would expect them to pay.

holly_hobby

Further to which any indemnity policy is effectively attached to the title deeds, and remains with them irrespective of a future change of owners.

It is typical for the Vendor to pay for a reqd indemnity policy.

Hope this helps

Holly

MAFERGAL

The vendor never mentioned the possessory title when we viewed etc. But maybe as has been suggested that's because the vendor didn't deem it a potential issue and/or there is already an indemnity that is transferable as he has been in the property for 6 years and I am purchasing it for less than he paid.
£50 upwards is not that bad... when I had figures of 1K upwards in my head

Richard_Webster

The vendor never mentioned the possessory title when we viewed etc.

Unfortunately this is a technical issue that a lot of lay people wouldn't understand. Their solicitor may have mentioned it when they bought - but a lot of folk simply don't remember that kind of thing. So it isn't particularly surprising.