Difficult seller?

confused_dotcodotuk

Hi - first time buyer here. Would like some advice on whether to complete or walk away. 

I first viewed the property last summer and made an offer early September. The place needs some work doing so I made an offer £15k below asking. Seller said no. £5k below asking. No. Asking price. Also no. I gave up and kept looking. After the UK economy absolutely tanked in October, the seller came back - via the estate agent - and said she’d accept an offer £10k above asking. I laughed at that. By December, she came back and said she’d take asking price. I said no - wasn’t feeling comfortable with how she’d behaved previously. Then by early Feb, after more uneventful viewings and seeing it was still on the market, I put in an offer £10k below asking. Seller said she currently had an offer £5k above original asking price but they were moving too slowly and if I could meet it, she’d accept. I didn’t feel comfortable with the fact she would dump the other seller - because who’s to say she wouldn’t do that to me? I said no. Seller offered it again at original asking price. At that point, I thought maybe she didn’t actually have another seller and accepted. They pushed to close quickly but otherwise things moved smoothly. Then I asked about the lease for my mortgage broker — when I’d first viewed the property, they’d told me it was over 900 years (it’s SoF - share of freehold) but now they’re saying it’s 85. I insisted the seller had to renew it. She refused. Then the agent said it was actually 105 years remaining and that that should be ok. Seller is saying she won’t renew because it will cost her £1000 now to hers alone — but that if all the flats in the building with the SoF renew at the same time when the lease is closer to 85 years remaining: then it will only be a £45 admin fee. 

Obviously will ask my solicitor but wondered what seasoned house buyers think of this? I like the flat but the whole process feels like it’s been unnecessarily difficult with the seller. Which is making me question whether to continue. Currently renting and lease is coming to an end so was hoping to move into my own home but now wondering if I should be looking for another rental.

1) Should I have stuck to my guns the second time when I offered £10k below?
2) Is the lease situation a big deal or not?

Any help would be massively appreciated! Thank you.

MikeJXE

Big deal or not it's been a load of hassle you don't need and may regret buying, I would walk away but thats me. 

koalakoala

I would also walk away

EssexHebridean

There is no issue with the 105 years left as far as lenders are concerned, and realistically you’ll have 20 years living there before you needed to worry about it.

From what you’ve said, I wouldn’t trust your seller as far as I could throw them, though!

diystarter7

Hi

Two very important points.

The lease at 105 years is not a problem for a shorter mortgage but may not like it if over 20 years. However, the lease as it stands is not going to cost a great deal of money as you have suggested in your post, so should be ok.

The seller's behaviour. TBH, I would not waste my time and to be even more honest, prices may go lower and I can see you back out. The bottom line, I can't see the sale is completed for one reason or another.

Your choice, your money, either way, good luck and if I turn out to be wrong which is rare, then in this case I'd be very happy about it

ThisIsWeird

Hi Confused.

If you like the flat, and if it's right for you, and if the price is right (ie, compare it with others, and take into account the current market), then go for it. Put aside all the carp given you by the seller - once you buy it and move in, that will be an irrelevance, a tatty memory - 'one day you'll look back on this and laugh'.

But, due diligence - which you would undertake with any property, but perhaps more when you feel you may have cause. Be guided by your conveyancing solicitor, ask them anything you are uncertain about (eg, whether top floor flats have responsibility for the roofs or is it shared - ideally the latter), and you, also, check out everything that you need to - boundaries and such stuff.

That leaves the issue with the lease. Whilst 105 years is just about 'ok', it ain't 900. In less than 10 years, potential buyers are going to take it into account. More than that, and it'll actively start to affect its value.

BUT, the really good news is that each flat leaseholder also has a share of the FH. And presumably each owner is also a 'director' in the property management co or similar? In which case, extending the lease - when all the folk decide it should be done - should be a formality. And cheap to do.

The same should apply to maintenance and other works - this would be decided in-house, and by a majority.

That's the theory - you would need to have this confirmed as one of the first points; you may have to wait until an offer is accepted and you employ a conveyancer, or there may be a way of having the seller putting in writing what they claim, so as to make them accountable? I dunno - an indemnity policy, which should cost a lot less than a current extension?

I certainly wouldn't take them on their word.

Another wee point - who told you it was a ~900 year lease? The EA? If so, they will surely have been (unintentionally...) misleading other potential buyers too, and that might explain the lack of interest, or changes of heart. So, the place may be 'valued' less by the other viewers than what the seller expects. But, as far as I can see, if the communal flat owners also own the FH, I cannot see how the lease issue can be a problem; "Item one on the agenda - extend all our leases to 999 years. All those in favour say 'aye'. AYE!! Carried..."

Any chance of checking the leases of some of the other flats? Or even knocking at a couple of doors and introducing yourself as a potential neighbour? If all the others are also on just 105 years, and do have a share of the FH (and without a separate, external, potentially-exploitative majority share-holder), then you 'should' be on safe ground. In which case, unfair to expect them to fork out £1k for something that ain't needed, but surely perfectly acceptable for them to pay, what?, a £ouple of £undred for an indemnity policy?

Try and put aside the emotive aspect - that will be irrelevant as soon as you move in.

EssexHebridean

It’s not quite as simple on the freehold lease extension as everyone just agreeing, but the share of the freehold/in the management co certainly makes life likely to be more straightforward. But to reiterate, there is no mortgage issue with a 105 years remaining lease - regardless if your mortgage is 15, 20, 25 years or even longer. You may have issues with remortgaging later (as in borrowing more against the property, not just changing to a new deal)  when a mortgage co might insist on an extension being done before they give further lending, but at the point you’re at now even that’s not likely to be a significant issue. 

ThisIsWeird

EssexHebridean said:

It’s not quite as simple on the freehold lease extension as everyone just agreeing, but the share of the freehold/in the management co certainly makes life likely to be more straightforward. But to reiterate, there is no mortgage issue with a 105 years remaining lease - regardless if your mortgage is 15, 20, 25 years or even longer. You may have issues with remortgaging later (as in borrowing more against the property, not just changing to a new deal)  when a mortgage co might insist on an extension being done before they give further lending, but at the point you’re at now even that’s not likely to be a significant issue. 

Thanks, EHebridian. (Which Hebdridian?)

Would an indemnity policy be a suitable alternative, do you know?

diystarter7

Hiya

it's a fact that judging by OP's post and as things stand the lease is straightforward and inexpensive when compared to leases in larger blocks or where the leaseholders often are not also part owners of the freehold.

OP, you won't know, nor will anyone else what the lender will say until you apply and lenders T&C's/risks vary and that is a fact.. As things stand it is pure  supposition that lender may or may not, etc. Importantly, markets can crash overnight and thing change and there was a mini earthquake in the financial markets last night so uil you get the money, no one knows.

A BTL/apartment on of our kids own, their lease is goig to cost sub 1k when they renew it within the next 12/24 months as they also share the FH. Leases cann be very expensive but this is not as things stand

Thnaks

user1977

ThisIsWeird said:

EssexHebridean said:

It’s not quite as simple on the freehold lease extension as everyone just agreeing, but the share of the freehold/in the management co certainly makes life likely to be more straightforward. But to reiterate, there is no mortgage issue with a 105 years remaining lease - regardless if your mortgage is 15, 20, 25 years or even longer. You may have issues with remortgaging later (as in borrowing more against the property, not just changing to a new deal)  when a mortgage co might insist on an extension being done before they give further lending, but at the point you’re at now even that’s not likely to be a significant issue. 

Would an indemnity policy be a suitable alternative, do you know?

What risk would the indemnity policy be covering? The only issue the OP seems to have mentioned is the duration of the lease - that's a fairly clear fact (once somebody bothers actually reading the lease to check...), you can't insure against it ending in 105 years.

diystarter7

ThisIsWeird said:

EssexHebridean said:

It’s not quite as simple on the freehold lease extension as everyone just agreeing, but the share of the freehold/in the management co certainly makes life likely to be more straightforward. But to reiterate, there is no mortgage issue with a 105 years remaining lease - regardless if your mortgage is 15, 20, 25 years or even longer. You may have issues with remortgaging later (as in borrowing more against the property, not just changing to a new deal)  when a mortgage co might insist on an extension being done before they give further lending, but at the point you’re at now even that’s not likely to be a significant issue. 

Thanks, EHebridian. (Which Hebdridian?)

Would an indemnity policy be a suitable alternative, do you know?

I'm confused, why would you want that?