Mortgage protection clause - shared ownership

soffie

long story but just found out our house doesnt have mortgage protection clause in the lease. we got a mortgage thru santander but couldnt with nationwide (makes sense now thinking back!)
im just thinking for future reference are we to be stuck with a unsellable house or could we ask for a deed of variation and have this added? just want to be clear how much of a mess we are in, if house is completely unsellable or not etc.

Mr_Singleton

Shared ownership = you don't own anything

Whats Mortgage protection clause?

mk_78

soffie wrote: »

long story but just found out our house doesnt have mortgage protection clause in the lease. we got a mortgage thru santander but couldnt with nationwide (makes sense now thinking back!)
im just thinking for future reference are we to be stuck with a unsellable house or could we ask for a deed of variation and have this added? just want to be clear how much of a mess we are in, if house is completely unsellable or not etc.

Is the remaining share owned by a registered provider ie Housing Association or a local authority ie Council?

When I bought my shared ownership house the conveyancers said that the lender (Nationwide) would require a deed of variation due to no MPC in the lease.

However it seems that the Nationwide guidance for conveyancers, in relation to the requirement for an MPC, states that there is an exception made for local authorities:

Mortgagee Protection Clause - If the Landlord when the lease was granted is a Registered Provider (with the exception of Local Authorities), the Lease must contain a Mortgagee Protection Clause in the Housing Corporation or Homes & Communities Agency standard form applicable at the time.

Source: http://www.nationwide.co.uk/~/media/MainSite/documents/about/media-centre-and-specialist-areas/information-for-lawyers/low-cost-home-ownership-special-schemes.pdf

I sent the above to the solicitors and the sale went through without a hitch.

kingstreet

Mr_Singleton wrote: »

Shared ownership = you don't own anything

Whats Mortgage protection clause?

You own the share you are purchasing.

A mortgage protection clause permits the lender to purchase the remaining share of the property from the RSL to facilitate selling it more easily.

soffie

Mr_Singleton wrote: »

Shared ownership = you don't own anything

Whats Mortgage protection clause?

Unfortunately we have come to realise the above is very true in the case of shared and all leasehold homes.


We are where we are tho. sold a dream, delivered a nightmare.

soffie

mk_78 wrote: »

Is the remaining share owned by a registered provider ie Housing Association or a local authority ie Council?

When I bought my shared ownership house the conveyancers said that the lender (Nationwide) would require a deed of variation due to no MPC in the lease.

However it seems that the Nationwide guidance for conveyancers, in relation to the requirement for an MPC, states that there is an exception made for local authorities:

Mortgagee Protection Clause - If the Landlord when the lease was granted is a Registered Provider (with the exception of Local Authorities), the Lease must contain a Mortgagee Protection Clause in the Housing Corporation or Homes & Communities Agency standard form applicable at the time.

Source: http://www.nationwide.co.uk/~/media/MainSite/documents/about/media-centre-and-specialist-areas/information-for-lawyers/low-cost-home-ownership-special-schemes.pdf

I sent the above to the solicitors and the sale went through without a hitch.

the lease is writen by a local council (MK Council) but the freehold later sold to another housing association, guinness partnership (who are the worst)
i dont know if this has any relevence?
we have a mortgage and bought the property 2017 but i am very concerned about implications when we do die and leave it to our child. will they get anything at all? etc..
when we went to a mortgage broker he said nationwide would not lend but santander would, there was a list of places that would with nationwide crossed out. we didnt think anything of it at all at the time as santander was the best deal anyway.. not sure what to think or to do.

mk_78

soffie wrote: »

the lease is writen by a local council (MK Council) but the freehold later sold to another housing association, guinness partnership (who are the worst)
i dont know if this has any relevence?
we have a mortgage and bought the property 2017 but i am very concerned about implications when we do die and leave it to our child. will they get anything at all? etc..
when we went to a mortgage broker he said nationwide would not lend but santander would, there was a list of places that would with nationwide crossed out. we didnt think anything of it at all at the time as santander was the best deal anyway.. not sure what to think or to do.

I think you may be in luck then, the Nationwide guidance says when the lease was GRANTED... when it was granted it was MK Council so looks like no MPC is required. Have a read through the Nationwide guide for conveyancers that I linked to.

My house is MK Council, I also purchased with a mortgage in 2017 - the mortgage broker didn't exclude Nationwide and it was only the solicitor who didn't have a clue about the Nationwide guidance saying no MPC was required and tried to tell me I needed a deed of variation. When I sent the link below they accepted they were wrong and the sale went through smoothly.

I'm sorry you feel so negatively towards shared ownership - for me it has been the dream, I have an amazing house in a great area for 2/3 of the cost of renting. When I've paid the mortgage off I'll have an amazing house in a great area with only a small monthly rent to pay. There is zero chance of me being able to buy on the open market and so if I didn't have this house I'd be paying more money for a smaller house with no security of tenure.

michelle230

If the shared ownership property in question is a leasehold property, then the correct term is lease-rent, rather than ownership. CMA have forbidden some adverts stating "home ownership" when the reality is that it is - "lease-rent".

soffie

mk_78 wrote: »

I think you may be in luck then, the Nationwide guidance says when the lease was GRANTED... when it was granted it was MK Council so looks like no MPC is required. Have a read through the Nationwide guide for conveyancers that I linked to.

My house is MK Council, I also purchased with a mortgage in 2017 - the mortgage broker didn't exclude Nationwide and it was only the solicitor who didn't have a clue about the Nationwide guidance saying no MPC was required and tried to tell me I needed a deed of variation. When I sent the link below they accepted they were wrong and the sale went through smoothly.

I'm sorry you feel so negatively towards shared ownership - for me it has been the dream, I have an amazing house in a great area for 2/3 of the cost of renting. When I've paid the mortgage off I'll have an amazing house in a great area with only a small monthly rent to pay. There is zero chance of me being able to buy on the open market and so if I didn't have this house I'd be paying more money for a smaller house with no security of tenure.

ours says it is writen by Milton Keynes Housing Association Limited to X guess this means Milton Keynes council / a local authority?
who is your freeholder? did you remain with MKHA or did it get sold? see our problem is ours got sold to Guinness Partnership and they absolutely rip you off.
Lease extensions and now this MPC is all the tip off payment after payment, probably 10k+ for both combined IF we have to add this MPC at some point.. I am more concerned that as a asset it will be dead, unsellable and leave the beneficiary when we die with a dead weight around their necks with rent arrears accumulating & accumulating till its sold, which may be never if this MPC is a massive issue.


Also with us the mortgage advisor said Nationwide wouldnt touch it not the solicitor. Maybe mortgage guy saw H/A was Guinness and so assumed lease was issued by them.

mk_78

soffie wrote: »

ours says it is writen by Milton Keynes Housing Association Limited to X guess this means Milton Keynes council / a local authority?
who is your freeholder? did you remain with MKHA or did it get sold? see our problem is ours got sold to Guinness Partnership and they absolutely rip you off.
Lease extensions and now this MPC is all the tip off payment after payment, probably 10k+ for both combined IF we have to add this MPC at some point.. I am more concerned that as a asset it will be dead, unsellable and leave the beneficiary when we die with a dead weight around their necks with rent arrears accumulating & accumulating till its sold, which may be never if this MPC is a massive issue.

Mine stayed with MK Council, although I'm getting close to needing a lease extension too which is annoying as I have no intention of moving but can't risk letting it drop below the magic number.

If you bought in 2017 you'll know how saleable shared ownership properties are in MK - people are prepared to pay 10-20k 'premiums' for quite literally nothing - one house I viewed had a 10k premium and it was like something of the TV landlord horror stories programs, an absolute wreck that looked like it had squatters!

Also you managed to buy successfully (using Santander) and from experience I know that Guinness properties sell almost immediately as I was trying to buy for around two years before I got this place, so those buyers of ex-MK Council/now Guinness have also managed to find a mortgage so it seems you might be worrying un-necessarily?

If it came to it your children could request the buyers pay for a deed of variation, if the shared ownership market is still as buoyant in MK, although you'd be crazy not to do the lease extension yourself. Or worst case they need to invest a few thousand for the deed of variation and then they get their inheritance once the property is sold.

I know this is obviously stressing you out but if you have a decent home in a decent area for less than it would cost to rent, and you can't afford to buy outright, you really should try and look on the bright side. With the way house prices are nowadays the younger generation are renting and so may have nothing to pass on to their children, at least you have your share and in the meantime are hopefully living in a nice house for far less than it would cost to rent.

soffie

mk_78 wrote: »

Mine stayed with MK Council, although I'm getting close to needing a lease extension too which is annoying as I have no intention of moving but can't risk letting it drop below the magic number.

If you bought in 2017 you'll know how saleable shared ownership properties are in MK - people are prepared to pay 10-20k 'premiums' for quite literally nothing - one house I viewed had a 10k premium and it was like something of the TV landlord horror stories programs, an absolute wreck that looked like it had squatters!

Also you managed to buy successfully (using Santander) and from experience I know that Guinness properties sell almost immediately as I was trying to buy for around two years before I got this place, so those buyers of ex-MK Council/now Guinness have also managed to find a mortgage so it seems you might be worrying un-necessarily?

If it came to it your children could request the buyers pay for a deed of variation, if the shared ownership market is still as buoyant in MK, although you'd be crazy not to do the lease extension yourself. Or worst case they need to invest a few thousand for the deed of variation and then they get their inheritance once the property is sold.

I know this is obviously stressing you out but if you have a decent home in a decent area for less than it would cost to rent, and you can't afford to buy outright, you really should try and look on the bright side. With the way house prices are nowadays the younger generation are renting and so may have nothing to pass on to their children, at least you have your share and in the meantime are hopefully living in a nice house for far less than it would cost to rent.

so does you lease say its between Milton Keynes Housing Association Limited and X (leasee)?
your very lucky you didnt end up with Guinness and got MK council,as Guinness charge you 100% lease premiums (mk council only RIGHTLY charge you what % you own) Guinness also have long lists of extensive and expensive Admin fees & generally are very incompetant as a Organisation. They need serious looking into by the Government especially since they pretend to be a Not for Profit Charity. (tax purposes clearly)