Estate agent advises leashold I thought freehold best ???

Doozergirl

The link for the free 'Deposit Protection Service'

http://www.depositprotection.com/default.aspx?bhjs=1&fla=1

Lizzy

Perhaps its not worth the hassle of it all. I thought it would be more complicated than the EA made it sound.
I might go and look at smaller properties in not such good area

I just looked at the deposit service, I had seen it before and I read you had to be a limited company. No doubt I have read that wrong.......
Also it states that if you receive more than £25.000 in rent per year you do not have to join a scheme. I hope thats true because its way over that.

Copied from the web site.

Who is affected?
The legislation covers virtually all new AST contracts through which private landlords let property in England and Wales.

However, the following will not need to be registered with a tenancy deposit protection scheme:

• resident landlords (those living in the property)
• landlords of properties with rent of over £25,000 a year
• company lets
• student accommodation let directly by universities or colleges.

Perhaps I don't need to register after all.

Doozergirl

You get over £25,000 from one property?!

The scheme does say it is open to all landlords and letting agents

Lizzy

It says properties I thought that was more than 1. Humm I suppose we could read that two ways.

Lizzy

btloptingout wrote: »

Can we have some more of the BTL rant?

When your mortgages come off their fixed rate terms what will the cash flow be like +ve or -ve?

It should still be a plus but its like a drop in wages............

Merton

Each BTL you rent from the bank is a potential home for someone to buy. It must be tough, financially and psychologically, to try to make a living from something so morally dubious. Good luck in getting out and doing something else.

BrandNewDay

Merton wrote: »

Each BTL you rent from the bank is a potential home for someone to buy. It must be tough, financially and psychologically, to try to make a living from something so morally dubious. Good luck in getting out and doing something else.

Personally, I've been very grateful for the last two homes we've rented. I wouldn't have wanted to BUY either of them.

Richard_Webster

You can go to the Land Registry and find out what titles they have registered. Anything (freehold or leasehold) that has been sold since 1990 in England & Wales has had to be registered so unless one of the titles hasn't been sold since before that date it should be registered. In most big cities the date is back in the 1960s/70s and in inner London 1901.

So you go to the LR website and check what titles they have for the proeprty - use the description of the building as a whole and then try the separate flat numbers e.g 23A, 23B etc. You should then establish how many titles there are and their numbers. If there is one freehold say XZ123456 and one leasehold XZ234567 then there's a good chance that it is simply a case of you getting the freehold of the whole building subject to the lease of the other flat(s) - this is acceptable to most lenders under 5.5.3 of the Council of Mortgage Lender's Handbook. HSBC can be funny about this and Bradford & Bingley/Mortgage Express don't like it but most major lenders will accept this situation.

You should check the actual titles to see their extent - is the freehold of the whole building? It costs £3 per title to download the entries and £3 for the plan.

If there is more than one freehold title and no leasehold then check the extent of each freehold - one might be of some garden land and nothing to do with much- but more likely they will be for separate freehold flats which are effectively unmortgageable except in Scarborough with a few lenders.

If this were the case the seller would need to get together with the other flatowner(s) and transfer all the freeholds into their combined joint names and then grant leases of the various flats. That can be an expensive exercise and it is better to let the seller sort it out - you should not get involve dint he mess unless the price is discounted quite heavily to reflect the hassle and that the property could only be bought by a cash buyer.

There could even be four titles - assuming only two flats - a freehold and a leasehold for each flat- that needs looking at more closely - it could be the Tyneside Flats scheme used by Laings for their maisonettes. This has downstairs flat A on a lease owned by Mr X and the freehold of that flat owned by Mr Y. Flat B upstairs has a lease owned by Mr Y and the freehold owned by Mr X - they each own each other's freehold and a mortgage lender takes a mortgage on the lease of the flat occupied (or let out) and also the reversion of the other flat. This is covered by 5.5.4 of the CML handbook and most major lenders will accept this. See http://www.cml.org.uk/handbook/frontpage.aspx
Choose England & Wales for Handbook and then pick you r lender form the drop down list and look at parts 1 & 2 - the part 2 answers are the specific lender's view about the particular detail.

The other possibility is that the seller doesn't understand the situation himself and it is a "shared freehold" where the freehold belongs to a company controlled by the flat owners or to them jointly as individuals. Then there are separate leases - it's just that some people get all worked up about it being"freehold" and forget that the leases still exist for the individual flats - but you find all this out by checking at the Land Registry.

This "shared freehold" situation is accepted by most lenders. If it owned by a separate company called something like "23 Any Road Management Limited" then this is a legally separate entity and from a lender's point of view no different from some property company owning the freehold.

Hope this clarifies a bit - but LOOK AT THE LAND REGISTRY entries!

As a conveyancing solicitor I believe the information given in the post to be useful but I accept no liability except to fee-paying clients

Lizzy

Thank you very much Richard and everyone for your input and time.

Richard, at first read it sounds complicated but I will print it off and study it carefully. I think it would really have to be a knock down price for me to be interested now. I might check with the land registery, but if the ground flat is freehold the owner may just refuse to co-operate (if thats allowed) and I could be left with a weight around my neck.

Thanks

Lizzy

Doozergirl

I'm a big fan of Richard Webster :T

There wouldn't be any benefit to downstairs not co-operating, Lizzy. They'd have to be pretty obtuse not to agree that if they do have seperate freeholds, that it would be better to make the flats share of freehold.

Once you find out for sure, then you could approach them, have a conversation at least

I would look into it and see if I could make a few pennies. I'm happy to take calculated risks - you just need to educate yourself beyong that of the average punter who is automnatically petrified of pretty much anything that a mortgage lender would waiver over. If you have a few properties, I hope you have a decent solicitor - talk to them once you've done some more research