Purchasing half of site

skintdairymaid

Hi, we are attempting to purchase a property from my father, he will retain some of the land as he plans to build on it in the future. Our broker is saying before we can apply for a mortgage the land and the house needs to be split and re registered with Land registry, he's spoken to lenders who are telling him this. Dad's solicitor says this is incorrect and a 'transfer of part' is to be completed when they are instructed. I'm stuck in the middle. Who's correct here and how can I move this forward? Many thanks

user1977

What does your own solicitor say? It's up to the requirements of whichever lender you're going with - your solicitor will have a better understanding of those than your broker.

Does your broker understand that ownership will be split on completion of your purchase? This isn't really any different from e.g. buying a newbuild house, which wouldn't normally have its own title until you register the split-off from the developer's title.

skintdairymaid

user1977 said:

What does your own solicitor say? It's up to the requirements of whichever lender you're going with - your solicitor will have a better understanding of those than your broker.

Does your broker understand that ownership will be split on completion of your purchase? This isn't really any different from e.g. buying a newbuild house, which wouldn't normally have its own title until you register the split-off from the developer's title.

Thanks. We don't have a solicitor instructed yet as we've not even got agreement in principle. I have used the new build scenario as an example to the broker but he still says the same thing, it must be split with Land registry. I feel like in missing something vital 🤷‍♀️🙈

sheramber

It may be a specific requirement of the lender/s the broker is dealing with. 

propertyrental

It can be split as part of the sale on Completion, using land Registry form TP1 (Transfer of Part).

Indeed this is how the big developers do it. They buy a huge plot, say a field, and build 50 houses. As each house is sold it is divided off the original Title of the field using TP1. The field is not divided into 50 titles in advance of sales.

Of course, some lenders may have their own rules/policies but I'd have thought most lenders would be familiar with this.

Someone may correct me, but I seem to recall that if a Title were split in two and both parts were retained in the name of the original owner of the full title, the LR would reject it. Each part has to be transferred into a different name, making it impossible to split in advance of a sale.

Land_Registry

If you are buying part of a title with a mortgage then the lender may say no unless split first. All depends on the mortgage lender and the product you are using. 

A title can be split providing there’s good reason to, so Dad could apply to split it first, you buy your part with a Transfer of whole and mortgage. 

So just confirm with the lender what they need to say Yes to your mortgage and not No