Mortgage on part of building

thomasbottom

Hi experts!

I am hoping someone with a lot of knowledge can help me.
The story is really really long winded so just to be brief.....would mortgage companies ever lend on part of a whole property? If the property is a bungalow and say the lounge, kitchen and utility room and front door is owned by a neighbour and the the other half owned by the occupier?
There is nothing in writing to say this...i mean that is owned jointly.

davidmcn

They'll only lend if they would be able easily to repossess and sell whatever they've got a mortgage over. So no, not an arbitrary selection of rooms within a house.

If you want more useful advice you'll need to tell us how this mess has arisen.

thomasbottom

davidmcn wrote: »

They'll only lend if they would be able easily to repossess and sell whatever they've got a mortgage over. So no, not an arbitrary selection of rooms within a house.

If you want more useful advice you'll need to tell us how this mess has arisen.

Thanks David...ok here goes, hope your head doesn't hurt after.
Large piece of land/farm was split in 1988 in order to create a retirement bungalow for the owners parents in the part that was split. !!!! up No 1 - the solicitor doing transfer drew the line in the wrong place using a 1977 OS plan. The original transfer party (moved from here about 13 years ago) have also confirmed it is wrong. Right shape wrong size.
1990 the bungalow was built - no they didn't decide to 'just build a larger property'.
Go through the years and the bungalow is sold 2 times with no mortgage needed. Then the main property on the original title is sold and new owners get a mortgage.....way down the line again and I try to sell the bungalow only to find half of the bungalow appears to be on next doors title....rooms as per above.
So after the current neighbours agree to do a transfer of part and we've done most of the ness through the solicitor it then comes to the neighbours lender saying they want a valuation on the part that is being transferred and then a separate valuation for their property/land etc.
My argument is that when they gave a mortgage to the neighbour they would not have come here and said ...'yes we will lend you money on half of next doors bungalow'. So that's why I am trying to find out as otherwise it's going to cost another £500 or so to get this done when I don't believe they actually lent on it in the first place...forgetting what's on the Title.
Confused???:rotfl:

flower77g

So after the current neighbours agree to do a transfer of part and we've done most of the mess through the solicitor it then comes to the neighbours lender saying they want a valuation on the part that is being transferred and then a separate valuation for their property/land etc.

Which a chartered surveyor would be able to do, surely? One method is for them to provide a valuation of the property the neighbour retains and its area in square metres. Use a calculator to determine the value of the retained land per square metre.



Then measure the area of the transferred land in square metres and assign the same value per square metre.

would mortgage companies ever lend on part of a whole property

Yes, some building societies can and will do this: look for and ask those who will lend on studio flats.

davidmcn

I think the point surely is that the lender's valuation wouldn't have attributed any value to the bungalow, because they weren't expecting part of it to be in their title. Probably needs someone with common sense to intervene.

flower77g wrote: »

Yes, some building societies can and will do this: look for and ask those who will lend on studio flats.

Not really the same thing - a studio flat is just a small flat. It's designed to be a self-contained property. The OP is talking about a house which accidentally has a legal boundary slicing it in half.

thomasbottom

davidmcn wrote: »

I think the point surely is that the lender's valuation wouldn't have attributed any value to the bungalow, because they weren't expecting part of it to be in their title. Probably needs someone with common sense to intervene.


Not really the same thing - a studio flat is just a small flat. It's designed to be a self-contained property. The OP is talking about a house which accidentally has a legal boundary slicing it in half.

Thanks again David. I'm grateful you took the time to read my question and answer in relation to what I asked :j
Someone with common sense though, may be a bit tricky. Solicitor hasn't put the logic to them and I don't think they've even explained it all to the lender.
I compiled a list of questions and hope my neighbour can ask his lender...
1/ How was the property valued by them originally? Did someone come out?

2/ Exactly what did they do the valuation on (buildings and land)?

3/ Did they enter the bungalow if they came out? If not, how can a valuation have been done on this part?

4/ Would they lend on ‘part’ of an occupied building?

5/ Did they use the OS plan or the title deed to determine which property/land was lent on?

Is there anything you think I may have left out or needs wording differently?