Freehold flats What mortgages

[Uncle Spielberg]

HSBC will probably do it but it is direct business only.

 

[User removed 4]

There's leasehold flats - all lenders will lend
There's leasehold, share of freehold flats - nearly all lenders will lend
There's freehold flats - a handful of lenders will lend
There's flying freehold - a handful of lenders will lend

why will they not lend on freehold flats , what makes them so risky ? i would have thought its the other way round ?

 

[Chicken Run]

why will they not lend on freehold flats , what makes them so risky ? i would have thought its the other way round ?

Quote:
Originally Posted by Uncle Spielberg
With a freehold flat there is no legal requirement for works to be done on the flat. The freehold is owned by the owners of the flat and if they want to do no work on the property and let it fall into a state of disrepair they can much like a house which is freehold but lenders view several people agreeing on things riskier.

And keeping things simple stupid if your flat is under or over said freehold flat that has fallen into a state of dis repair i think you will agree the value of yours will be compromised and with the mortgage being secured on the value you understand why lenders are concerned! When the is a freehold house converted into the flats the individual flats will have a lease with responsibility toowards upkeep

 

[Emily's Mum]

why will they not lend on freehold flats , what makes them so risky ? i would have thought its the other way round ?

I'll try & explain:

When you buy a conventional Leasehold Flat, each flat in the block (be it a block or house conversion) will have a Lease which is given by the original freeholder. The lease is the legal document that stipulates what you own & what you don't, what you have to repair, what you have to contribute to & most other things that you can & can't do to your flat.

The Lease will contain legal covenants that makes each leaseholder responsible for for various repairs (or by way of contributions to a maintenance fund).

For example:

If I owned the top floor flat of a two-story conversion the lease might make me responsible for repairing the roof or guttering if it leaked. If I owned the ground floor the lease might make me responsible for repairing the drains or foundations.

Why does this matter?

If the guttering on the top floor leaked & made the ground floor walls damp, the owner of the ground floor flat would be able to take the owner of the top floor flat to court if they did not repair the guttering (as they were supposed to do under the lease).

Why does this matter when getting a mortgage?

If the owner of the top floor flat did not repair the guttering & the damp got worse in the ground floor flat, the ground floor flat's value would decrease.
A bank always needs to look at future marketability should they repossess the property. I the flats in our example were freehold & the bank repssessed the ground floor flat, it would not have a legal leg to stand on to make the owner of the top floor flat get the guttering fixed.


Or another example would be the owner of a ground floor flat not maintaining the walls. If the top floor flat started collapsing, the owner of the top floor flat (or mortgagee in possession) wouldn't be able to make the owner of the ground floor flat repair them; thus rendering your property worthless. In otherwords, if you don't own the structure that your property sits on, or there is no lease in place, you are the mercy of someone else if anything goes wrong.

Here endeth today's lesson.

If anyone needs any more advice, please PM me, let's not bore the whole of NSC!

 

[Chicken Run]

I'll try & explain:

When you buy a conventional Leasehold Flat, each flat in the block (be it a block or house conversion) will have a Lease which is given by the original freeholder. The lease is the legal document that stipulates what you own & what you don't, what you have to repair, what you have to contribute to & most other things that you can & can't do to your flat.

The Lease will contain legal covenants that makes each leaseholder responsible for for various repairs (or by way of contributions to a maintenance fund).

For example:

If I owned the top floor flat of a two-story conversion the lease might make me responsible for repairing the roof or guttering if it leaked. If I owned the ground floor the lease might make me responsible for repairing the drains or foundations.

Why does this matter?

If the guttering on the top floor leaked & made the ground floor walls damp, the owner of the ground floor flat would be able to take the owner of the top floor flat to court if they did not repair the guttering (as they were supposed to do under the lease).

Why does this matter when getting a mortgage?

If the owner of the top floor flat did not repair the guttering & the damp got worse in the ground floor flat, the ground floor flat's value would decrease.
A bank always needs to look at future marketability should they repossess the property. I the flats in our example were freehold & the bank repssessed the ground floor flat, it would not have a legal leg to stand on to make the owner of the top floor flat get the guttering fixed.


Or another example would be the owner of a ground floor flat not maintaining the walls. If the top floor flat started collapsing, the owner of the top floor flat (or mortgagee in possession) wouldn't be able to make the owner of the ground floor flat repair them; thus rendering your property worthless. In otherwords, if you don't own the structure that your property sits on, or there is no lease in place, you are the mercy of someone else if anything goes wrong.

Here endeth today's lesson.

If anyone needs any more advice, please PM me, let's not bore the whole of NSC!

Very nicely put, you still wouldnt convince a nice old dear though that a Freehold flat is the devils spawn, they buy it anyway often against their solicitors and familys advice live happily ever after, move to heaven and then leave it to the family to deal with

 

[Emily's Mum]

Very nicely put, you still wouldnt convince a nice old dear though that a Freehold flat is the devils spawn, they buy it anyway often against their solicitors and familys advice live happily ever after, move to heaven and then leave it to the family to deal with

Which is why there's lots of them in Worthing!!!!

 

[Blackadder]

Here endeth today's lesson.

If anyone needs any more advice, please PM me, let's not bore the whole of NSC!

Actually, I found that quite interesting. Never fully appreciated the difference. Thanks for the info.