Flying freehold

Didgee49

Hi Martin. I bought my house 18 years ago with a flying freehold. I have an indemnity policy should any damage occur. This has not been an issue.
Twice now my house has been sale agreed but the buyers could not get a mortgage as the flying threshold is more than 25% of the house. I am now 71 and have an interest only mortgage with Santander . They extended the period of the mortgage and are charging me a lot more each month.
This extension expires next year. So I now have a house that is unsaleable and a debt. My question I s are the solicitors or Santander responsible at all for my predicament? 
I would be grateful for any advice you can give
Keep up the good work
 Best wishes
Maureen Harkness

princeofpounds

Hello Maureen. This is a forum - Martin doesn't post on here in response to individuals. But hopefully you will get input from a wide variety of users.

It is much more difficult to get a mortgage on a flying freehold than other properties, true. The main problem is that the freeholds that sit on top of one another do not automatically oblige each other to maintain their structures. So if I owned the property below, I could let my structure decay and there would be nothing you could do about it.

Santander are certainly not responsible for your situation. They are actually in a similar situation to you - the property is their security. Your original solicitor had a duty to explain that it was a flying freehold and what the implications of that might be. It sounds like they did the former, given you knew you had one, but whether they did the latter well or not is hard for me to say. Certainly mortgage lending criteria has been tightened over the years in some ways, they can only be held up to the standards of their time. After 18 years, I suspect that you'll have a hard time putting any liability on the solicitor either.

Having said that - what may help?

- There are a number of lenders who will lend on flying freeholds. The basic positions of each are set out in the CML handbook. https://www.cml.org.uk/lenders-handbook/englandandwales/question-list/1835/. You and your agent can look at this and it may help filter buyers who can vs. buyers who can't.
- Getting a covenant in the deeds with your supporting and supported neighbours for mutual rights of support and maintenance can help with a lot of lenders. Do you have one of these or not? If not, you may find it possible to get one as it would benefit your neighbour too.
- Similarly, indemnity insurance can help with some lenders - your solicitor should be able to explore the cost of this option for you.
- Given that many of the criteria are to do with % of floor area, you may wish to investigate building a small extension, perhaps under permitted development rules to make planning easier. It may tip you below the threshold.
- A cash buyer can still buy the property. Ultimately you could consider auction as a route to a sale. You won't get the best price, but it may be better off than paying extortionate mortgage indefinitey.

Two further questions:
How much money remains on your mortgage balance?
Why do you need to sell?

davidmcn

Didgee49 said:

So I now have a house that is unsaleable and a debt. My question I s are the solicitors or Santander responsible at all for my predicament? 

The lender isn't responsible in the slightest - they didn't advise you to buy the house, did they?

After 18 years I doubt you can go back to your solicitor, and bearing in mind that the general market view (and lenders' criteria) change from time to time, it may well be the case that the advice you received at the time was reasonable.

greatcrested

The best soluion, both in terms of managing maintence/repairs, and (consequently) in terms of achieving a sale, would be a Covenant agreed with your neighbour and lodged against both properties' titles.

That would set out the obligations each property owner has to the other, to maintain their own part of the FF, to allow the other access to maintain their own etc

That resolves most of the legal issues that a FF poses.