House has fallen through due to flying freehold, who is to 'blame'

loveka

I looked on the list, and they say they will lend but it can only be 25%. This is what we sent the deeds to the broker about. The bit of ours which 'flies' over another property is15%. However, there is another property on top of ours- essentially a flat. They say this means the property is 100% affected by flying freehold. This is what we checked with the broker- he said it was only the bit of our house that flies over another property that counts.

It seems he was wrong.

We can't do another lender, there are so few that do holiday let and none of them accept 100% flying freehold. We couldn't do a residential mortgage on it, we don't earn enough!

I though so future buyer may want to buy the survey we had for maybe half we paid? We offered to buy the survey from the people who dropped out, but they didn't want to sell it.

marksoton

It sounds like a combination of your solicitor and broker letting you down. TBF to the broker they're not really any better qualified than any of us to interpret title deeds.

If money is so tight are you really sure a holiday let is the best way to go?

silvercar

I don't see what the great attraction of a holiday let is. More work than an ordinary let I would have thought.

loveka

The attraction is the yield a holiday let can bring in, and the fact that the mortgage is based on the income of the property, rather than the income of the person buying the property. If house prices fall, or rents fall, the theory is a holiday let holds its rental value because it's a holiday let, the weekly rent doesn't go down. Personally I wouldn't buy a buy to let at the moment, because house prices are so high.

You do have to be careful of course to get one with a track record of letting. This particular one rents out 45 weeks a year, and has for 20 years.

A holiday let makes more sense for us than a buy to let. We have done our sums! It may not work for other people with other circumstances.

I don't think money has to be 'tight' to feel annoyed at having thrown money away!

AnnieO1234

For £3 you can check the charges register, if it's currently mortgaged it should hopefully be mortgageable xxx

anselld

loveka wrote: »

The house we were buying has a small bedroom that'flies' over the property below. However, there is another property above which 'flies' over us. Effectively it is a flat, but the front doors are all in a row at ground level. There is also a 999 year lease.

I dont understand how it can have both a flying freehold and a lease.

If the property you are buying is leasehold then the shape/layout of the freehold which contains it is irrelevant. The fact that the leased demise is over two floors is irrelevant as is the fact that there is another flat above.

Alternatively, if the property is freehold then what is the lease you refer to?

silvercar

loveka wrote: »

The attraction is the yield a holiday let can bring in, and the fact that the mortgage is based on the income of the property, rather than the income of the person buying the property. If house prices fall, or rents fall, the theory is a holiday let holds its rental value because it's a holiday let, the weekly rent doesn't go down. Personally I wouldn't buy a buy to let at the moment, because house prices are so high.

You do have to be careful of course to get one with a track record of letting. This particular one rents out 45 weeks a year, and has for 20 years.

A holiday let makes more sense for us than a buy to let. We have done our sums! It may not work for other people with other circumstances.

I don't think money has to be 'tight' to feel annoyed at having thrown money away!

I understand the points you are making, just don't underestimate the work involved. Also the extra costs that earning that extra yield. All the utilities and council tax will reduce your bottom line, plus the laundry, cleaning and servicing.

anselld wrote: »

I dont understand how it can have both a flying freehold and a lease.

If the property you are buying is leasehold then the shape/layout of the freehold which contains it is irrelevant. The fact that the leased demise is over two floors is irrelevant as is the fact that there is another flat above.

Alternatively, if the property is freehold then what is the lease you refer to?

I agree with this. I would suggest there is some confusion by your broker. If it is leasehold, then the mortgage is on the lease that covers the property being "bought" and flying freeholds don't matter. If it is freehold then they do matter, but then there is no lease.

AnnieO1234

I would disagree here. There are plenty of leasehold terraces where the bedroom of one property is over the archway belonging to the other property. It's still classed as a flying freehold despite both properties being leasehold.

xx

loveka

Yes, we tried that argument about how it can have a flying freehold and a leasehold with the mortgage company. It didn't wash sadly.

There is a 999 year lease, we have seen it. But the solicitor said it does also have flying freehold.

No mortgage on it currently. The owner paid cash for it 20 years ago. He will make a very tidy sum when it sells. I think he will need a cash buyer though, as it is all so com p located!

Yes, we have taken into account all utilities, cleaning etc. The yield takes all that into account and is still much higher than a buy to let would be, simply because it rents for quite a lot due to its location. We are so disappointed to lose it, as well as the cash we have spent.

marksoton

There comes a point where you're better off just cutting your losses,walking away and investing in something else.