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Getting a mortgage for a leasehold property with absentee freeholder
IOW_lover
Posts: 1 Newbie
My partner and I are looking at purchasing our first home together, and will require a lender to agree a mortgage.
The property we are interested in (a semi-detached house) is on the market for £150K but we may be able to get it for £140K ish. We have a healthy £50K to put down as a deposit.
The reason for my email is that we found out that it is a leasehold property with 999 years left on the lease which started 100 years ago. The issue is that the freeholder is absentee and has been apparently for a long while. The information given by the estate agent is: " There are a lot of leaseholder properties on the Isle of Wight as about 100 years ago some wealthy families owned a lot of the land and rather that sell it they leased it out, however pretty much all of these families have now long gone hence the absentee freeholder. If you own the property for 12 years you can apply to land registry for the freehold and as long as no one comes out of the woodwork it can be put in your name. As it stands the current owners do have a mortgage on it and had no trouble getting it."[/I][/I]
The current owners got a mortgage and had no problem with their lender, however this was years ago. We are told they have an Absentee freeholder indemnity policy in place.
I have had contact with UKGI Legal Indemnities and they advised that in order to obtain insurance I would need to approach a solicitor or insurance broker. However, as long as I met all the term and conditions the premium for a policy would be £49.00 which would be a one off payment.
So Iam wondering whether any of you lovely bloggers have come across this issue and what advise you can give me please? I have read blogs all over the internet about such, but they were all related to flats rather than a house.. and they were also closed threads dating a few years ago. Would lender accept a absentee freeholder indemnity cover to let us have a mortgage? Is the basic figure I was quoted at around £50 realistic or is it more likely to be hundreds ++ £?
Many thanks for your assistance.
The property we are interested in (a semi-detached house) is on the market for £150K but we may be able to get it for £140K ish. We have a healthy £50K to put down as a deposit.
The reason for my email is that we found out that it is a leasehold property with 999 years left on the lease which started 100 years ago. The issue is that the freeholder is absentee and has been apparently for a long while. The information given by the estate agent is: " There are a lot of leaseholder properties on the Isle of Wight as about 100 years ago some wealthy families owned a lot of the land and rather that sell it they leased it out, however pretty much all of these families have now long gone hence the absentee freeholder. If you own the property for 12 years you can apply to land registry for the freehold and as long as no one comes out of the woodwork it can be put in your name. As it stands the current owners do have a mortgage on it and had no trouble getting it."[/I][/I]
The current owners got a mortgage and had no problem with their lender, however this was years ago. We are told they have an Absentee freeholder indemnity policy in place.
I have had contact with UKGI Legal Indemnities and they advised that in order to obtain insurance I would need to approach a solicitor or insurance broker. However, as long as I met all the term and conditions the premium for a policy would be £49.00 which would be a one off payment.
So Iam wondering whether any of you lovely bloggers have come across this issue and what advise you can give me please? I have read blogs all over the internet about such, but they were all related to flats rather than a house.. and they were also closed threads dating a few years ago. Would lender accept a absentee freeholder indemnity cover to let us have a mortgage? Is the basic figure I was quoted at around £50 realistic or is it more likely to be hundreds ++ £?
Many thanks for your assistance.
0
Comments
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Is the absentee freeholder named on the lease?
Has anyone investigated the identity of his heirs or successors?
If you have a name, it might be possible to get hold of a copy of his will as a start.
https://www.gov.uk/wills-probate-inheritance/searching-for-probate-records0 -
Investigating the freeholder could invalidate the the insurance policy.
We had the same issue on my flat. A large town house was developed into four flats in 1987 and the freeholder disappeared.
It was no problem at all. We got a mortgage - the lender just asked for the policy. We needed an indemnity and contingent buildings insurance.0
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