We are about to exchange contracts for a property in East London. We have hit a snag. The loan offer with The Mortgage Works expires on 1/7/2024 but the owners are suggesting a completion date of 3/7/2024. Is it possible to extend the mortgage offer?
The person best placed to deal with your issue is your solicitors who is in a position to assess whether they should be discussing with the lender, seller’s solicitors, selling agents or possibly all parties based on the history of your conveyancing to date.
What does my ID and proof of funds have anything to do with my conveyancing in East London? What am I being asked for?
In order to comply with Money Laundering Regulations any East London conveyancing firm will require proof of identity in all conveyancing matters. This is usually satisfied by provision of a passport and an original bank statement or utility bill evidencing your correct address.
In accordance with Money Laundering Regulations, conveyancing solicitors are obliged by law to check not only the ID of conveyancing clients but also the origin of fund that they receive in respect of any matter. An unwillingness to disclose this may lead to your conveyancer ending their relationship with you, as clearly this will cause a conflict between the set Regulations and a refusal to disclose.
Your conveyancers will have an obligation to inform the relevant authorities should they consider that any monies received by them may contravene the Anti-terror and anti-money-laundering rules.
About to place a bid on a leasehold property in East London. The property agents advise that it is normal for flats in East London to have less than 75 years unexpired on the lease. I am obtaining a mortgage with The Mortgage Works. Will the property be mortgageable given that the lease has 70 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. The Mortgage Works have specific requirements as set out in the UK Finance Lenders’ Handbook in relation to minimum unexpired lease terms. As of 29/4/2024 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'm the sole beneficiary of my late grandmother’s estate with all property in now in my sole name, including the house in East London. Conveyancing formalities meant that the Land Registry date was in March. I plan to dispose of the house. I do know about the CML six month 'rule', which means that my proprietorship could be considered the same way as if I'd bought the house in March. Is the property unsalable for six months?
The Council of Mortgage Lenders’ handbook instructs solicitors to: "report to us immediately if the owner or registered proprietor has been registered for less than six months." By the strict wording you might be caught by that. many lenders would take a pragmatic view as this provision principally exists to identify subsales or the flipping of properties.
Are all East London Conveyancing Quality Solicitors on the Principality conveyancing list of approved firms?
It is true that some lenders now use the accreditation scheme as the starting point for Panel approval such as HSBC and Santander. The Law Society’s CQS membership however gives no guarantee to lender panel acceptance. That being said,the CML have indicated that it is likely to become a pre-requisite for solicitor practices wishing to join their approved list of firms.
Skipton have agreed my mortgage in principle, my bid on a house in East London has been accepted, what happens next?
The estate agent will wish to know who your solicitors are (be sure the lawyers are on the bank’s panel). Telephone Skipton or your financial adviser and finish off any outstanding paperwork. Skipton will instruct a valuer who will get in touch with the estate agent or owners to arrange a slot for the valuation to happen. Once carried out (assuming no problems) it takes about a week for the mortgage offer to be issued. Skipton will issue the offer to you and your conveyancers. The transaction will then take it’s course according the nature and complexity of the conveyancing in East London.
Is it necessary during the course of the conveyancing process to attend the offices of the mortgage company conveyancing panel solicitor to execute the mortgage deed? If so, I will appoint a lawyer who conducts conveyancing in East London as it will be easier to attend their offices when needed.
Most conveyancing panel lawyers for the mortgage company undertake all of the work via the post, internet or over the phone. This means that they can undertake your Conveyancing Transaction no matter where you live in England or Wales. YOu dont have to use a conveyancing solicitor in East London. it would nevertheless be wise to check if you can still book an appointment to go into appointed conveyancing lawyer if you prefer.