Possessory Title / House Value

theheadshrinker

Hi,
I am currently in the process of buying a house and have just been told that I will only have Possessory Title (Not Absolute Title) due to the deeds being lost by the deceased previous owner. I was not made aware of this when we agreed on the purchase price and I am wondering what sort of effect this would have on the value of the property. I am particularly keen to hear from anybody that has experience of renegotiating the price due to Possessory Title.

I feel that I should renegotiate the price to reflect the title issue but I am struggling to establish what sort percentage to aim for. Obviously I want to pay as least as possible but I don't to ask for something that is completely unrealistic either.

The seller will pay for the Indemnity Insurance and I know that the title can be upgraded to Absolute Title after 12 years but I am only likely to own the property for a couple of years. I am not too concerned about the issue myself, I am more worried about the effect on my resale value and the property not being as appealing to my future potential buyers.

Any guidance on what effect that Possessory Title has on the value of a property would be much appreciated.

DE_612183

Can you ask the seller to provide a policy to indemnify you against loss?

Tiglet2

theheadshrinker said:

Hi,
I am currently in the process of buying a house and have just been told that I will only have Possessory Title (Not Absolute Title) due to the deeds being lost by the deceased previous owner. I was not made aware of this when we agreed on the purchase price and I am wondering what sort of effect this would have on the value of the property. I am particularly keen to hear from anybody that has experience of renegotiating the price due to Possessory Title.

I feel that I should renegotiate the price to reflect the title issue but I am struggling to establish what sort percentage to aim for. Obviously I want to pay as least as possible but I don't to ask for something that is completely unrealistic either.

The seller will pay for the Indemnity Insurance and I know that the title can be upgraded to Absolute Title after 12 years but I am only likely to own the property for a couple of years. I am not too concerned about the issue myself, I am more worried about the effect on my resale value and the property not being as appealing to my future potential buyers.

Any guidance on what effect that Possessory Title has on the value of a property would be much appreciated.

DE_612183 said:

Can you ask the seller to provide a policy to indemnify you against loss?

Have all the deeds been lost or just one document not provided at registration?  How old is the missing deed?

BarelySentientAI

theheadshrinker said:

Any guidance on what effect that Possessory Title has on the value of a property would be much appreciated.

Minimal. 

Might cut down the pool of potential buyers because some will be scared off, but I wouldn't expect a price change.  After all, you're still buying it and are not concerned about the issue.

theheadshrinker

Tiglet2 said:

theheadshrinker said:

Hi,
I am currently in the process of buying a house and have just been told that I will only have Possessory Title (Not Absolute Title) due to the deeds being lost by the deceased previous owner. I was not made aware of this when we agreed on the purchase price and I am wondering what sort of effect this would have on the value of the property. I am particularly keen to hear from anybody that has experience of renegotiating the price due to Possessory Title.

I feel that I should renegotiate the price to reflect the title issue but I am struggling to establish what sort percentage to aim for. Obviously I want to pay as least as possible but I don't to ask for something that is completely unrealistic either.

The seller will pay for the Indemnity Insurance and I know that the title can be upgraded to Absolute Title after 12 years but I am only likely to own the property for a couple of years. I am not too concerned about the issue myself, I am more worried about the effect on my resale value and the property not being as appealing to my future potential buyers.

Any guidance on what effect that Possessory Title has on the value of a property would be much appreciated.

DE_612183 said:

Can you ask the seller to provide a policy to indemnify you against loss?

Have all the deeds been lost or just one document not provided at registration?  How old is the missing deed?

Tiglet2 - Thanks for your reply, it appears that all deeds have been lost and from what I can gather the previous owner had been there for over 30 years

Millsandovis

BarelySentientAI said:

theheadshrinker said:

Any guidance on what effect that Possessory Title has on the value of a property would be much appreciated.

Minimal. 

Might cut down the pool of potential buyers because some will be scared off, but I wouldn't expect a price change.  After all, you're still buying it and are not concerned about the issue.

He’s only just found out and he is concerned by it, hence the thread. 

I would have thought it would affect the value for sure. Why wouldn’t it? 

theheadshrinker

BarelySentientAI said:

theheadshrinker said:

Any guidance on what effect that Possessory Title has on the value of a property would be much appreciated.

Minimal. 

Might cut down the pool of potential buyers because some will be scared off, but I wouldn't expect a price change.  After all, you're still buying it and are not concerned about the issue.

BarelySentientAI - Thanks for your reply. While I am not overly concerned about the issue, I do feel like it would have some sort of negative effect on the value and I'm worried that I won't be able to get the full market value when I come to the sell the property in a couple of years.

BarelySentientAI

Millsandovis said:

BarelySentientAI said:

theheadshrinker said:

Any guidance on what effect that Possessory Title has on the value of a property would be much appreciated.

Minimal. 

Might cut down the pool of potential buyers because some will be scared off, but I wouldn't expect a price change.  After all, you're still buying it and are not concerned about the issue.

He’s only just found out and he is concerned by it, hence the thread. 

In the original post - "I am not too concerned about the issue myself".

Millsandovis said:

BarelySentientAI said:

theheadshrinker said:

Any guidance on what effect that Possessory Title has on the value of a property would be much appreciated.

Minimal. 

Might cut down the pool of potential buyers because some will be scared off, but I wouldn't expect a price change.  After all, you're still buying it and are not concerned about the issue.

I would have thought it would affect the value for sure. Why wouldn’t it? 

Because there is almost no additional risk, which can be taken care of through an indemnity insurance policy.

What is the actual risk that someone turns up with documents that prove the seller has been mistaken for 30 years and didn't own the property.  That tells you how big any devalue should be.

annetheman

When I was researching this recently, I found multiple sources saying similar to above - effect on value is negligible, but  it can mean a smaller pool of potential buyers because buyers like Absolute Titles. 

It would worry me if the Possessory land had an accessway or part of the building (I guess you have both as it is the whole house) and there was ever any potential for a claim to the land by someone else. If the land was previously unregistered per the Land Registry maps, I'd proceed with the price agreed. 

I, like you, am proceeding with a Possessory Title + indemnity insurance, however for me the Possessory bit is just part of the garden. The seller didn't know it was unregistered himself (he has owned it for >24 years, so he would have Absolute Title by now if he did, and got his AR1 in right away. I did get it -£25k off asking before I knew, so I knew a further reduction was unlikely anyway, as it is something they are already mitigating against any losses by providing the indemnity insurance to cover at their (small) expense. It also makes no difference to my lender (as long as there's indemnity insurance if there is a building on the land), and they actually didn't care at all after we told them - no new valuation was required - Santander.

It might put some people off, meaning it might take a little while longer to sell, but there are plenty of people who will be happy with the indemnity insurance in place. I just got probably the cheapest house near a zone 3 tube station in London in 2024, so I'm happy!

If you feel you are overpaying anyway, though, look at it from a broader lense rather than just the Title, and perhaps consider if it's worth the risk of collapse to re-negotiate. You don't get if you don't ask but yeah - that's the risk.