I am nearing exchange of contracts for my house in Rothwell and the estate agent has just e-mailed to advise that the buyers are changing their solicitor. I am told that this is due to the fact that the mortgage company will only engage with property lawyers on their approved list. On what basis would a major lender only deal with specific solicitors rather the firm that they want to choose to handle their conveyancing in Rothwell ?
Lenders have always had an approved set of law firms they are willing to work with, but in the past few years big names such as HSBC, have reviewed and reduced their conveyancing panel– in some cases removing conveyancing firms who have represented them for many years.
Lending institutions point to the increase in fraud by way of justification for the reduction – criteria have been tightened as a smaller panel is easier to keep an eye on. No lender will say how many solicitors have been dropped, claiming the information is commercially sensitive, but the Law Society says it is being contacted daily by practices that have been removed from panels. Some are unaware that they have been dropped until contacted by a borrower who has instructed them as might be the situation in your buyers' case. Your buyers are unlikely to have any sway in the decision.
About to place an offer on a leasehold property in Rothwell. The selling agents assure me that it is usual for flats in Rothwell to have less than 75 years remaining. I am obtaining a loan with The Mortgage Works. Will the property be mortgageable given that the lease has 70 years left.
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. The Mortgage Works have specific requirements as set out in the UK Finance Lenders’ Handbook in relation to minimum unexpired lease terms. As of 19/12/2024 the requirements read as follows :
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
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 70 years
- 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 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 70 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 1.0% 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
- 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
- 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 reviewed and altered on any review basis or methodology
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 1.0% 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 the Issuing Office
I am looking for a leasehold apartment up to £305k and identified one near me in Rothwell I like with a park and transport links in the vicinity, the downside is that it only has 49 remaining years left on the lease. I can't really find anything else in Rothwell for this price, so just wondered if I would be making a mistake purchasing a short lease?
If you need a mortgage the shortness of the lease will likely be an issue. Discount the offer by the expected lease extension will cost if not already taken into account. If the existing proprietor has owned the premises for a minimum of twenty four months you can ask them to commence the lease extension formalities and pass it to you. An additional ninety years can be extended on to the current lease term with a zero ground rent applied. You should consult your conveyancing solicitor concerning this.
I wish to rent out my leasehold flat in Rothwell. Conveyancing solicitor who did the purchase is retired - so can't ask him. Is permission from the freeholder required?
The lease dictates the relationship between the freeholder and you the flat owner; specifically, it will say if subletting is banned, or permitted but only subject to certain conditions. The accepted inference is that if the lease contains no specific ban or restriction, subletting is allowed. The majority of leases in Rothwell do not contain subletting altogether – such a clause would adversely affect the market value the property. In most cases there is simply a requirement that the owner notifies the freeholder, possibly supplying a duplicate of the sublease.
Rothwell Leasehold Conveyancing - Examples of Queries Prior to buying
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Please note that where the lease has no more than 80 years it will affect the marketability of the property. Check with your lender that they are willing to go ahead with the loan given the lease term. Leases with less than 80 years remaining means that you will almost definitely have to extend the lease sooner rather than later and you need to have some idea of how much this will be. For most Rothwelllease extensions you will need to own the residence for a couple of years in order to be eligible to extend the lease. How many years are left on the lease? How many of the leaseholders are in arrears for their service charge payments?
I see that you have a post code search directory identifying law firms on the mortgage company conveyancing panel. Do Rothwell conveyancing companies pay you a referral fee if I instruct them for my conveyancing?
We are a listing service only for law firms wishing to communicate if they are on the mortgage company conveyancing panel or other lender panels. We do not charge referral fees to the any conveyancer that you subsequently appoint for your conveyancing in Rothwell.