Missold a freehold

davidmcn

G_M wrote: »

Nowhere (unless I missed it) does OP say he used a mortgage for the purchase

It was in the OP:

Vect wrote: »

After scraping together every last penny for the deposit and fees, I'm now going to be rinsed again, just so I can keep my mortgage competitive after the initial period is over.

Even if the lender was prepared to accept it, I still think the solicitor should have warned of the likely difficulty in persuading any future lender (or purchaser) to do so.

Vect

Mortgage obtained from Santander (25 year term)
Cost to extend lease:
61 - £8k - 9k + costs
63 - £7k - 8k + costs
70 - £5k + costs
82 - £2k + costs

bouicca21

Like GM I'm assuming he was a cash buyer. In which case if the valuation (surely he got one?) agreed with the purchase price, then he may have got a bargain.

[Deleted User]

HappyMJ wrote: »

You still have the option of extending the lease any time in the next 60 years.

How much is it going to cost to extend the lease in 2 years time?

How much would it have cost had there been 70 years left on the lease? Which is the usual minimum required for a mortgage term of 30 years.

What about if it had 82 years left on the lease? The optimal term remaining for extending the lease after 2 years of ownership.

MJ makes a good point, which is about your way forward now. Your previous posts say: purchase price 78k, ground rent £10.

From lease-advise.org calculators that gives 7-8k plus costs for renewal at 61 years.

This is vs 4-5k if it were 70 years, and 2k at 80 years.

I know it's a big blow to have such a large bill coming, that you didn't expect - my sympathies.

davidmcn

Vect wrote: »

Mortgage obtained from Santander (25 year term)

In which case their standard CML Handbook requirements are:

Our minimum unexpired lease term is 55 years from completion, subject to at least 30 years remaining at the end of the mortgage term (an individual case instruction may provide for a shorter unexpired term). However, you must report the unexpired lease term to us and await our instructions if:
1. the unexpired term assumed by our valuer is between 55 and 82 years, but the actual unexpired term differs by more than one year (whether longer or shorter); or
2. the unexpired term assumed by our valuer is more than 82 years but the actual unexpired term is less than 82 years; or
3. no valuation report is provided
We will accept a lease that has been extended under the provisions of the Leasehold Reform Act 1993 provided statutory compensation would be available to the leaseholder.

so possibly no need for the solicitor to have reported it to the lender depending on what the valuation said.

Thrugelmir

davidmcn wrote: »

so possibly no need for the solicitor to have reported it to the lender depending on what the valuation said.

Lender appears to have accepted remaining lease term.

Vect, did you apply direct or use a broker?

[Deleted User]

So maybe the property is worth 6 to 7 thousand less than you initially thought.

I suppose the question is does this turn a fair price to a rip-off?

Or is it more like turning a bargain to a fair price?

Vect

Purchase price was £73,000. The neighbours are struggling to sell theirs at £80k, marked down from £90k, and it's slightly larger due to an extension, but less recently decorated. I'm unsure of how long their lease is, I'm going to inquire when I'm back from the US.

I used a broker who is an extension of the estate agent.

I can just about stomach this bill if it adds the same value to my home. But it's a kick in the spuds to having to spend all my savings again. As for bargain/fair price, I feel I paid a fair price for this house, although now it looks like I've been ripped off.

I feel the best course of action moving forward, misselling or no, is to apply for the extension in time for remortgaging, and remortgage at the new value at a (then) reduced equity, to soften the blow of spending my savings. I'm 27 and single, £10,000 is a huge amount of money to me.

Nobbie1967

Vect wrote: »

I used a broker who is an extension of the estate agent./QUOTE]

I wonder if the broker steered you towards a provider who wouldn't have a problem with the short lease so that you weren't alerted to this issue?

marksoton

Vect wrote: »

I used a broker who is an extension of the estate agent.

If you take one thing from all this it's this. Don't do it!

I'd wager this is exactly the reason the risk was not spelt out to you.