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Its not a 'Freehold Flat'!!! Or at least that's what I think... I think?!?!
lovinituk
Posts: 5,711 Forumite
My wife retained ownership of her flat when we moved in together and we've rented it out ever since.
Its a 1-up, 1-down converted house. My wife owns the ground floor flat and also owns the freehold of the whole building.
Now there has been some confusion recently when briefly mentioning it to a mortgage broker with regards to looking to re-mortgage for a better deal (or possibly sell this year to add more capital for funding a larger house move). The broker pretty much turned his nose up at it when he heard "freehold" and "flat" in the same sentence (I do understand why many lenders won't lend on a freehold flat). I've done some reading and think I understand it but would like some clarification from the clever folks in the know here.
My understanding is that it is NOT a true freehold flat but it is in fact "a freehold house subject to the lease on the first floor flat".
If my understanding is correct, should it be easy enough to approach most/all lenders without any (too many!) issues? It is currently on a Buy to Let mortgage with Nationwides old commercial arm (not Mortgage Works, the other one that I can't remember the name of right now!).
Similarly, if we do decide to sell it, I can imagine some Estate Agents missing the point, so how we do describe it to them?
Its a 1-up, 1-down converted house. My wife owns the ground floor flat and also owns the freehold of the whole building.
Now there has been some confusion recently when briefly mentioning it to a mortgage broker with regards to looking to re-mortgage for a better deal (or possibly sell this year to add more capital for funding a larger house move). The broker pretty much turned his nose up at it when he heard "freehold" and "flat" in the same sentence (I do understand why many lenders won't lend on a freehold flat). I've done some reading and think I understand it but would like some clarification from the clever folks in the know here.
My understanding is that it is NOT a true freehold flat but it is in fact "a freehold house subject to the lease on the first floor flat".
If my understanding is correct, should it be easy enough to approach most/all lenders without any (too many!) issues? It is currently on a Buy to Let mortgage with Nationwides old commercial arm (not Mortgage Works, the other one that I can't remember the name of right now!).
Similarly, if we do decide to sell it, I can imagine some Estate Agents missing the point, so how we do describe it to them?
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Comments
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A frequent cause of confusion by people in our industry who know 'half of not much'.
The flat is leasehold.
The fact that your partner owns the freehold is incidental.
Normally in these case the freehold is held by a limited company the shares of which are owned by the flat owner.
If this is the case, happy days.
If the freehold is held in a personal name and the is therefore in the same ownership of the lease, some lenders can be funny about it.I am a Mortgage Broker
You should note that this site doesn't check my status as a Mortgage Broker, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.0 -
It's the latter. Would it be beneficial to form a limited company and pass the freehold to that? Or invite the owner of the 1st floor flat to share the freehold? They have not long paid us for an extension on their lease so I guess we could just share the freehold for free (they're unlikely to want to pay anything more).If the freehold is held in a personal name and the is therefore in the same ownership of the lease, some lenders can be funny about it.
From a reselling point of view, does it add value by keeping ownership of the freehold rather than sharing it?0
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