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Division of land title or splitting deeds??

I've recently been lucky enough to get planning consent for a new 4 bed house in my garden which will have its own access drive and be completely separated from my current property with a fence.
In order to get a self build mortgage I will need to have the garden separated from my current house deeds as my current house is mortgaged. I understand the current mortgage company will need to agree to this and in principal they have no problem subject to valuation check.
I've approached the solicitor we bought our house with about splitting the deeds so that we can apply for a separate mortgage on the plot however they have said its not that simple as I cannot just split my deeds and put the garden in both my wife and my name as our house deeds are in both our names as well and potentially would need to just have the one name on the plot deeds but this obviously has mortgage implications(actual email stated you cannot transfer land from your joint names into joint names) . Some friends have advised me to get a second opinion so I briefly spoke with the land registry earlier and have been advised that I can submit a form for the division of land title. No guarantee they will except the request but will only cost £40. Is the division of land title the same as splitting the deeds????? Will this enable me to apply for a self build mortgage in both our names?
Any help or advice would be gratefully received.
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Comments

  • I assume that the whole property is held in joint names and ideally you want it to stay that way. Is there any issue about the new mortgage lender requiring the self-build mortgage just to be in one name?

    I don't really get all this stuff about transferring it to yourselves.

    If your present lender is happy that it has enough security in the existing house and its new reduced curtilage then it will be prepared to release the part of the existing title that you want to build on from the mortgage. If you then grant a mortgage over the new plot to another lender then it will be set up initially as a mortgage of that part of the title. In all likelihood, the Land Registry will then issue a separate title number for that bit - thereby "splitting the deeds".

    Hopefully Land Registry Representative will tell me if I am wrong.
    RICHARD WEBSTER

    As a retired conveyancing solicitor I believe the information given in the post to be useful assuming any properties concerned are in England/Wales but I accept no liability for it.
  • thanks for the speedy replies!
    I will follow up with an email enquiry to the land registry I think to ensure I've interpreted what they've said correctly but I was just a little confused why the solicitor has said the transfer is not possible but I can divide the title direct with land registry.

    My main issue if I can't is the fact that if the new plot is only allowed to have 1 of our names on the deeds then the self builder mortgage lender will only take 1 of our incomes in to consideration when lending.
    For me it seems logical that you can split the deeds and keep in both names but there must be something I'm missing in relation to what my solicitor is saying or I have misinterpreted what the land registry has said.
    Cheers
    David
  • Land_Registry
    Land_Registry Posts: 5,750
    First Anniversary Name Dropper First Post
    Organisation Representative
    The solicitir seems to be focussing on the need to transfer the part of the Garden out of the existing title. You can't transfer from yourselves to yourselves so the two names to one has been suggested. Possible but unnecessary and potentially impacting in wider issues such as the mortgage etc

    So you can apply to split the title as we've already explained. That involves an AP1, suitable plan and £40 fee. Plus an explanation as to why you want it split referring to the lender's requirements

    Richard Webster is quite correct but over the years the approach of many lenders has changed with them now insisting it is split before they will lend. In the past they would do as Richard posts - it would be interesting to know why your lender wants it split before?
    Official Company Representative
    I am the official company representative of Land Registry. MSE has given permission for me to post in response to queries about the company, so that I can help solve issues. You can see my name on the companies with permission to post list. I am not allowed to tout for business at all. If you believe I am please report it to [email protected] This does NOT imply any form of approval of my company or its products by MSE"
  • Thank you for the reply Land Registry, my current mortgage is with hsbc (in both my wife and my name)and they dont do self build mortgages so the idea is that if the garden is separated from house and is in both of our names also then we will be able to get a separate mortgage together to build the house.Potentially hsbc will allow the garden to be released subject to valuation of our current house to ensure it still covers the mortgage value.
    Was just a little concerned after speaking with the solicitor that we couldnt separate the garden but from what your saying if I'm able to split the title then that should enable us to get another lender to supply a self build mortgage (if I've interpreted correctly!!). Once the new build is constructed we plan to move in and then sell the bungalow we currently live in.
  • Hopefully Land Registry can help!

    I have a plot of land with a 9 Bed HMO on it, I have planning in to split the HMO into two houses and to build a new house on the end - pre agreed at pre app, expected in 2 weeks.

    The property is currently owned in our SPV Limited Company.

    We want to split the title into 3 seperate titles to mortgage each property separately yet retain ownership of all three within our Ltd on a freehold basis.

    As we're not selling it's proving a little complicated - all the solicitors are telling me that although it is possible that Land Registry will split the titles - we can't grant access rights to ourselves, so, when coming to mortgaging those new houses the titles won't stand up for mortgage purposes.

    It's been suggested we transfer the properties into another part of the company, creating the 'transfer' required to go through the necessary legal steps of granting access rights etc. I'm awaiting tax advice but assuming this route isn't ideal tax wise and I don't really want these properties to leave the main SPV anyway.

    Is it possible to split a title and retain ownership of all the titles and successfully re mortgage those properties?

    With build to rent being popular this has to be doable....!

    Any and all help appreciated...
  • Land_Registry
    Land_Registry Posts: 5,750
    First Anniversary Name Dropper First Post
    Organisation Representative
    edited 15 March 2018 at 6:18AM
    iainlarge wrote: »
    Hopefully Land Registry can help!

    I have a plot of land with a 9 Bed HMO on it, I have planning in to split the HMO into two houses and to build a new house on the end - pre agreed at pre app, expected in 2 weeks.

    The property is currently owned in our SPV Limited Company.

    We want to split the title into 3 seperate titles to mortgage each property separately yet retain ownership of all three within our Ltd on a freehold basis.

    As we're not selling it's proving a little complicated - all the solicitors are telling me that although it is possible that Land Registry will split the titles - we can't grant access rights to ourselves, so, when coming to mortgaging those new houses the titles won't stand up for mortgage purposes.

    It's been suggested we transfer the properties into another part of the company, creating the 'transfer' required to go through the necessary legal steps of granting access rights etc. I'm awaiting tax advice but assuming this route isn't ideal tax wise and I don't really want these properties to leave the main SPV anyway.

    Is it possible to split a title and retain ownership of all the titles and successfully re mortgage those properties?

    With build to rent being popular this has to be doable....!

    Any and all help appreciated...

    It's possible to split in the way suggested and remortgage although the latter relies on the lender of course.

    From a registration perspective we have always split when everything has been done and each part is sold off. In essence you create a new title for each sold part and new owner.

    If part only is mortgaged we reference that part and keep it in the title so you have an entry which refers to a charge affecting the land edged blue or similar. That's been the approach for a long time and part of the reason for not splitting a title, based solely on a mortgage of part, is considering the easements and other register entries can complicate matters

    As the OP confirms lenders want to go a different route re a charge of part but I've yet to hear what their reasons are other than that's the type of mortgage they are offering.

    Your solicitors are correct if you want to create new easements then you'll need different owners too.

    It's the first I've heard re them not standing up for mortgage purposes if the easements aren't there but i can see the logic - if you default, house repossessed and sold then the easements aren't there and a problem in selling exists. So another reason why a charge of part is seen by us at least as the better option.

    Hope you unravel it to everyone's satisfaction and please let us know on here what the outcome is
    Official Company Representative
    I am the official company representative of Land Registry. MSE has given permission for me to post in response to queries about the company, so that I can help solve issues. You can see my name on the companies with permission to post list. I am not allowed to tout for business at all. If you believe I am please report it to [email protected] This does NOT imply any form of approval of my company or its products by MSE"
  • Thanks Land Registry, really appreciated.

    It's sounding like the only way to do this will to be - Set up a new Ltd, wholly owned by the original Ltd (therefore no tax in transferring the property) and move the properties across which will then provide the transfer required for the access rights etc. to be granted.!!

    It's going to mean an increase in the bill from the accountants and the cost of setting up a new SPV for holding property.!

    Be delighted if anyone had any further suggestions or advice?!
  • Hi Just a quick note, did you successfully split the title on your property? We are in an almost identical situation and after asking the coventry, our existing lender, if they would allow the garden plot to be released they wish us to appoint a solicitor (fees...!)

    I want to ensure I know where I stand before I ask the esteemed legal profession to get involved.

    I hope your build is going well if you have started it.

    Best wishes Phil
  • Does this also apply to a house. I have planning to turn 4 bed house into 2 self contained flats and 2-3 bed house to the rear. Was told to wait until mortgage was due for renewal and apply to release equity.
    When I went to do this I was told the bank doesn't do this.
    Also fed me a lot of rubbish. Went to the bank and spoke to the person who told me about it before. She said they do it. I would have to split the deeds first. So here I go.
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