Look over this mortgage valuation survey please?

fiwen30

Halifax completed the mortgage survey on the house we’ve been accepted on, and sent this in the post.

We are silly FTBs, and I’m kicking myself roundly for not asking/checking first, but the fact that the property is leasehold came as a surprise. We’ve no idea who owns the freehold, or how much the ground rent charge is.

The surveyor states they haven't seen the lease, and that their valuation ‘assumes an unexpired lease of at least 85 years’ - is this wording usual for a mortgage valuation on a leasehold property?

I understand that a lease with less that 85 years on it will potentially be non-mortgageable. How likely is it that the property will have just 85 years left on the lease? Or is it more likely that there’ll be many years left, and that it will only affect the valuation if it’s <85 years?
I’ve got myself into a bit of a tizz, because we really can’t afford to fork out extra thousands on extending the lease after purchase.

We’re in Northern Ireland - is there a way for us to check who the freeholder is, and how much the ground rent charge costs, ourselves? Or is it worth calling our conveyancer, who should have the lease details by now, and asking them for the info?

As an aside - should we worry about buying into a leasehold house? The concept sounds bloody awful if I’m honest, but I don’t know if that’s an ignorant, knee-jerk reaction to not liking the idea of owning the land your (£££) house stands on.

davidmcn

It's your solicitor who tells you whether it's leasehold or not, and what the remaining term is - so ask them. As the surveyor has said, they just assume that the lease (if any) is of a sort which is going to be mortgageable, and (like the other assumptions they make) it will be up to the solicitors to check back with the surveyor if they discover anything which might adversely affect the valuation.

UMACK99

I’m in Northern Ireland also and was somewhat surprised to find the bungalow I am purchasing was leasehold.  My lease though is for 9000 years.  My solicitor told me that in Northern Ireland the leases tend to be longer than in England and the ground rent tends to be fixed (mine will be only £35 per year - though the freeholder seems to have gone out of business so this hasn’t been collected for some years).  Your solicitor will get a copy of the lease from the vendor and will walk you through it all.

fiwen30

Thank you both! That’s really put my mind at ease, I appreciate it.

Will shoot the conveyancer an email in the morning. We’ve paid our initial retainer fee, plus the fee for initial searches, so they should have the info on the lease.

NameUnavailable

As an aside - should we worry about buying into a leasehold house? The concept sounds bloody awful if I’m honest, but I don’t know if that’s an ignorant, knee-jerk reaction to not liking the idea of owning the land your (£££) house stands on.

Just for clarity, if it's leasehold you don't own anything other than the lease. The property and the land belong to the freeholder and your lease is a long term rental agreement.

ikanoi

davidmcn said:

As the surveyor has said, they just assume that the lease (if any) is of a sort which is going to be mortgageable, and (like the other assumptions they make)

I'm only a FTB so I could be wrong but I don't think the leasehold will be an assumption at this point. You won't get a valuation without submitting a mortgage application, and you wouldn't be able to submit a mortgage application without letting the bank know if it's a leasehold and the length of it.

Similarly, I just received my Halifax valuation. It also states "I have not seen the lease and my valuation assumes and unexpired term of at least 250 years..." which I know is correct.

Google lease calculator check the price of an extension, you can potentially re-negotiate on this basis. 

davidmcn

ikanoi said:

davidmcn said:

As the surveyor has said, they just assume that the lease (if any) is of a sort which is going to be mortgageable, and (like the other assumptions they make)

I'm only a FTB so I could be wrong but I don't think the leasehold will be an assumption at this point. You won't get a valuation without submitting a mortgage application, and you wouldn't be able to submit a mortgage application without letting the bank know if it's a leasehold and the length of it.

That could just be somebody's semi-educated guess though (and is often wrong). These steps generally take place before the buyer's solicitor has looked at the lease. Once the surveyor has seen the property, it's easy enough for them to tweak their valuation if necessary once they've been told about the actual type of tenure or the details of the lease.

fiwen30

ikanoi said:

davidmcn said:

As the surveyor has said, they just assume that the lease (if any) is of a sort which is going to be mortgageable, and (like the other assumptions they make)

I'm only a FTB so I could be wrong but I don't think the leasehold will be an assumption at this point. You won't get a valuation without submitting a mortgage application, and you wouldn't be able to submit a mortgage application without letting the bank know if it's a leasehold and the length of it.

Similarly, I just received my Halifax valuation. It also states "I have not seen the lease and my valuation assumes and unexpired term of at least 250 years..." which I know is correct.

Google lease calculator check the price of an extension, you can potentially re-negotiate on this basis. 

!!!!!!, then it really might only have 85 years left on it, since our mortgage application has been submitted 😬

fiwen30

Update: I emailed my solicitor on the 21st asking for details about the lease (length, cost of ground rent, and whether it might be prudent/possible to purchase the freehold after the house purchase - we’re in NI). Didn’t get a reply. Today we’ve just had our mortgage application accepted! I went to phone our solicitor to chase about the lease details, and I noticed that on their conveyancing estimate they sent when we instructed them, the tenure is listed as freehold 🙃

So the solicitors estimate of costs is based on the property being freehold, and yet the lender’s valuation survey is based on the property being leasehold!

Does anyone know of a way to check the tenure status of a property in Northern Ireland myself? 

[Deleted User]

who submitted the mortgage application?  The leasehold information hasnt just magically appeared.   Halifax system asks if its freehold or leasehold and if the latter asks for how long is left on the lease.  Whoever submitted the mortgage application has told the lender it is a leasehold house with 85 years left on the lease. 

AdrianC

fiwen30 said:

As an aside - should we worry about buying into a leasehold house? The concept sounds bloody awful if I’m honest, but I don’t know if that’s an ignorant, knee-jerk reaction to not liking the idea of owning the land your (£££) house stands on.

Some of the most expensive property in the country is leasehold - vast swathes of prime central London.

The Duke of Westminster, one of the country's richest people? One of his main assets is the freehold of 300 acres of Mayfair and Belgravia. The Bedford Estate owns much of Bloomsbury, the Cadogan Estate Chelsea and Knightsbridge, the Portman estate Marylebone.