About to place a bid on a leasehold flat in Box. The estate agents say that it is standard for flats in Box to have less than 75 years unexpired on the lease. I am expecting a mortgage with Nationwide Building Society. Will the property be mortgageable given that the lease has 69 years to go.
Most leasehold conveyancing experts should be able to deal with a lease extension. if you are obtaining a mortgage then your lender may insist that the lease be extended before competition. Nationwide Building Society have specific requirements as set out in the UK Finance Lenders’ Handbook in relation to minimum unexpired lease terms. As of 10/4/2024 the requirements read as follows :
- There must be at least 30 years remaining at the end of the mortgage term (regardless of the length of lease at the start).
Where the unexpired lease term is different to that recorded on the mortgage offer, the following clarifies if we need to be informed:
Second hand property:
- If the unexpired lease term on the offer is 85 years or more - only advise us if the actual lease term is less than 85 years
- if the unexpired lease term on the offer is less than 85 years – advise us if the actual lease term is different than reported
- For equity share applications - advise us if the actual lease term is different than reported on the offer
- Where lending is over 85% of the purchase price/valuation on a second hand flat and the unexpired lease term on the offer is 90 years or more - only advise us if the actual lease term is less than 90 years.
New build property:
- If the unexpired lease term stated on the offer is 125 years (flat) / 250 years (house) or more - only advise us if the actual lease term is less than 125 years (flat) / 250 years (house)
- For equity share applications - always advise us if the actual lease term is different than reported on the offer
Lease terms such as ground rent and event fees must be reasonable at all times during the term of the lease and adhere to our requirements below. If you’re unsure as to whether the terms of a lease are unreasonable or onerous, please refer the details to us in plain English for Valuer consideration. If the potentially onerous terms are in relation to the ground rent please include the current ground rent figure per annum, how often it will be reviewed and the price structure it will be reviewed against. See the guidance below.
SECOND HAND PROPERTIES
Unacceptable - advise Issuing Office (Will be declined):
- Unexpired lease term less than 55 years
- Unexpired lease term less than 90 years where we are lending more than 85% of the purchase price/valuation on a second hand flat
- Less than 30 years remaining at the end of the mortgage term
- Ground Rent greater than 0.5% of the property value
- Ground Rent doubles less than every 20 years (e.g. doubles every 5, 10 or 15 years) - acceptable if doubles every 20 years or more
- Ground Rent is compounded RPI
- Ground Rent review period is less than or equal to 5 years
Refer to Issuing Office (Valuer will consider any impact on valuation figure and marketability):
- Unexpired lease term is 55 to 85 years
- Ground Rent greater than 0.1% and less than or equal to 0.5% of the property value
- Ground Rent escalation is linked to any indices greater than RPI
- Ground Rent escalation is linked to the value of the building*
- Ground Rent review period is greater than 5 and less than 10 years
- Event clauses exist for normal use e.g. changing the carpet, installing a TV aerial, etc
- Estate Rent Charges greater than £500 p/a (please provide details of what the charges cover)
- Service Charges greater than 1% of property value p/a (please provide details of what the charges cover)
- Anything that appears onerous, unusual or out of the ordinary
Acceptable (no requirement to advise Issuing Office):
- Unexpired lease term greater than 85 years (Minimum 90 years where we are lending more than 85% of the purchase price/valuation on a second hand flat)
- Ground Rent less than or equal to 0.1% of the property value
- Ground Rent review period greater than or equal to 10 years
- Ground Rent escalation less than or equal to RPI
NEW BUILD PROPERTIES (includes office conversions)
Unacceptable - advise Issuing Office (Will be declined)
- Unexpired lease term less than 125 years on a new build flat or less than 250 years on a new build house (does not apply to Shared Ownership)
- Any lease which is subject to a Ground Rent (or Annual Rent) being charged which is more than on a peppercorn basis
- Any lease which is subject to a Ground Rent (or Annual Rent) being charged which is more than on a peppercorn basis
Refer to Issuing Office (Valuer will consider any impact on valuation figure and marketability):
- Event clauses exist for normal use e.g. changing the carpet, installing a TV aerial etc
- Estate Rent Charges greater than £500 p/a (please provide details of what the charges cover)
- Service Charges greater than 1% of property value p/a (please provide details of what the charges cover)
- Anything else appears onerous, unusual or out of the ordinary
Acceptable (no requirement to advise Issuing Office):
- Unexpired lease term greater than or equal to 125 years on a new build flat or greater than or equal to 250 years on a new build house
- A lease subject to a peppercorn Ground Rent (Annual Rent) charges
For the avoidance of doubt, any New Build properties completed but not sold pre-30 June 2022 will only be acceptable if the Lease conforms to the above guidance.
* Where the Ground Rent escalation is linked to the value of the building, please provide the following:
- How is the value of the block/unit currently calculated and if the assessment relates to the block(s), how is the Ground Rent calculated/apportioned per property?
- The current valuation and Ground Rent for each unit
- What is the mechanism for future valuations of the block and how is the Ground Rent calculated/apportioned?
- What is the right of appeal? And is this a documented process within the lease?
- Who bears the cost of the valuation (and appeal) process?
- Confirmation the review period is not less than twenty years.
Lease Extensions
We require all Lease Extensions to be completed under the Leasehold Reform Housing and Urban Development Act 1993 and to meet the above criteria as a minimum. Where you become aware that it does not meet these requirements, please refer to Issuing Office.
I can see plenty of information on this site regarding conveyancing in Box but what is your top tip for finding the right conveyancer in Box
We would encourage you not to base your choice on the cheapest Box conveyancing quote. You really do get what you’re paying for when it comes to property lawyers. A cheap quote may mean that the conveyancing solicitor is handling a lot of jobs at one time and you won’t get the quality of service and the attention that you need. It is, however, wise to use a conveyancer who has a fixed fee on a no sale, no fee basis. This way, you know exactly what you’ll have to pay in ahead of time.
We are aiming to move house in May. Does my conveyancing solicitor update the removal company on the completion day. As an aside, can you put forward a removal company in Box. Conveyancing lawyer was found before I stumbled across your website.
On the day of completion you will need to collect the keys from your selling agent but this can only occur once the previous owners lawyers advise the agent that they acknowledge receipt of the completion payment and the keys can be collected. After that you can inform the removal men that you are ready to move in. We do not recommend a specific removal organisation but can help you locate a residential property solicitor in Box or a firm that specialises in conveyancing in Box.
I can not fathom if my lender requires a lease extension. I have called my Box building society branch on numerous occasions and was told it does not impact the mortgage offer and they would lend. My Box conveyancing solicitor - who is on the bank conveyancing panel- called to say that they will not lend in accordance with their UK Finance Lenders’ Handbook minimum lease term requirements. I simply don't know who is right.
The lawyer has to comply with the Council of Mortgage Lenders’ Handbook Part 2 requirements for your bank. Unless your lawyer obtains specific confirmation in writing that the mortgage company will go ahead, your lawyer has no choice but to refrain from exchanging contract and committing you to the purchase. We would suggest that you ask the bank to contact your lawyer in writing confirming that they will accept the number of years left on the lease.
Do I need to take out insurance to protect me from financial exposure to chancel repairs when purchasing a residence in Box?
Unless a prior purchase of the property took place post 12 October 2013 you can take it that conveyancing practitioners handling conveyancing in Box to remain encouraging a chancel search and or chancel repair liability insurance.
The deeds to my house can not be found. The conveyancers who conducted the conveyancing in Box 4 years ago are no longer around. What do I do?
You no longer need to hold title deeds to evidence that you are the registered proprietor of land or property, given that the Land Registry hold details of all registered land or property electronically.
I am looking for a leasehold apartment up to £245,000 and identified one near me in Box I like with amenity areas and transport links in the vicinity, the downside is that it only has 52 years unexpired on the lease. I can't really find anything else in Box for this price, so just wondered if I would be making a mistake buying a lease with such few years left?
If you need a mortgage the shortness of the lease may be an issue. Reduce the price by the expected lease extension will cost if not already taken into account. If the current owner has owned the premises for at least twenty four months you can request that they start the process of the extension and then assign it to you. An additional ninety years can be extended on to the current lease with a zero ground rent applied. You should consult your conveyancing lawyer regarding this.
My step-father has suggested that I instruct his conveyancers in Box. Should I use them?
There are no two ways about it the ideal way to find a conveyancing practitioner is to seek referrals from friends or family who have actually experience in using the conveyancer you're contemplating using.