Deeds of Variation Mortgage Refusal

Shane2904

Hi, I’m new to this forum and this ismy first post however I am looking for advice on my options in trying to sell my 2 bedroom apartment. We bought the Taylor Wimpey property 7 years ago as a new build and have had two kids in this time and need to up size for obvious reasons.

When we bought the property we were young and unaware of a lot of the complexities involved but somehow ended up with a leasehold/ground rent that was to double every ten years (only aware of this a few years ago and we are now looking at possible legal action as we feel we were poorly advised by the solicitors that we used, they were recommended to use by Taylor Wimpey). What has since transpired is to make the sale of our property more appealing we were told to move our lease to a deeds of variation in line with RPI every ten years which we have now done for what we thought would be our benefit.

In December we agreed the sale of our property, we bought it brand new for £93k, we are selling for £72k due to the value dropping out of the properties in the area due to adverse press on the lease. Nearly five months down the line and close to completion the buyer has now been refused a mortgage by 4 different lenders (he has a £40k deposit and is only borrowing £32k) Santander refused due to the lease being over 0.33% of the property value, nationwide and NatWest both refused as they won’t deal with these leases and Halifax wouldn’t lend due to the lease being under review every ten years.

After finding what we thought was the ideal buyer he has now been scared off and pulled out of the purchase, we feel that we are stuck with an unsellable flat with limited space for a family of four to live in. I’m at the end of ideas, renting etc are all difficult as I feel we’re just kicking the can down the road and the sale is still seemingly impossible at any stage.

Any help or avenues or advice on what we could possibly do would be greatly appreciated. (Sorry for the long text).
Cheers
Shane.

cattie

These people might be able to advise you of the best way forward. It's a government funded agency offering free advice to residential leaseholders.

https://www.lease-advice.org/

AdrianC

How much would buying the freehold cost?
Or going for a statutory extension, to take you to peppercorn ground rent?

Shane2904

I am now looking at a possible extension, we still have 115 years remaining currently at £330 a year so I would guess expensive to extend or buy out. Unsurprisingly Honeground who our ground rent is with will charge us £100 for a lease extension quote that takes 10 days to come through.

AdrianC

No, don't ask them for a quote. That's not a statutory extension. That's just asking them nicely - they can impose whatever terms and price they like...

You need to speak to a solicitor about a statutory extension, or about buying the freehold.

The statutory lease extension calculator doesn't take account of rising ground rents, so the figure it gives will be low - but it reckons £5-6k.
https://www.lease-advice.org/calculator/

Shane2904

Thanks Adrian, I’ve just had a look, guessing £5k-£6k plus have to pay ours and the lease companies legal fees would be close to £10k.
Maybe our only option but a nightmare of an outlay just because of this scandalous lease situation we have ended in.
Appreciate the guidance.

AdrianC

So you spend £10k, and can sell your house for ~£15k more than if you don't?

Sounds like a bloody good return to me...

The time to complain about the lease was before you agreed to be bound to it.

Shane2904

The issue is I don’t have £10k hanging around and there is zero equity in the property. There would be no way I would get £15k additional for the property as the area is renowned for doubling leases and the amount of properties up for sale is frightening all property price on the plot have decreased, even the houses are affected by this lease issue and inability to sell.

Regards complaining prior to agreeing to the lease trust me if I was aware at the time of purchasing I would not have. The underhand leasehold tactics employed by some of these new builds is an absaloute scandal, the government I believe are looking at it, it’s been discussed in parliament and claims are being made against the solicitors, I for instance am making a claim against our original solicitors as it was years after the purchase that we were made aware of the doubling ground rent, the solicitor we used as recommended by Taylor Wimpey in no way acted in our best interests and guided/made us aware of this issue.

Honestly feel misled and taken advantage of regarding the whole thing so although I should of complained when bound I was unaware of the doubling plus the fact lenders would refuse to mortgage these properties down the line.

Surely I shouldn’t be in a position of getting on the property ladder and left with an unsellable home due to a developer selling a lease off to some money making investor.

Just very frustrating.

AdrianC

When you say there's zero equity, is that selling at £72k? Because if spending £10k and adding £15k to the sale price does happen, then that's £5k of equity...

Yes, properties that have doubling leases are blighted - but yours wouldn't have, post-statutory-renewal. It'd have a peppercorn-rent lease of 200yrs.

Nobody knew back then that lenders would change their minds in the future. People aren't psychic. And whether the lease has been sold on is irrelevant, if the original stated doubling every ten years...

michelle230

This is what is now being recognised as the Leasehold scandal which unfortunately you have fallen victim to. You are far from alone and the nightmare of being trapped in your home as a result of your onerous lease terms is becoming a widespread issue particularly with new build shared ownership schemes.
Please do not deal with this on your own.
Join us at the two groups - National Leasehold Campaign and Leasehold Knowledge Partnership.
You will get valuable advice there which will clarify your options.
Above all do not do anything before you have read up on this issue.

michelle230

...and you were misled. This is a recognised fact in your case especially if you were enticed (or as in some cases forced) to use a developer's recommended solicitor.