Halifax Mortgage DAK

[Dicky99]

I had a buyer lined up to buy my flat until I discovered yesterday that they've pulled out due to Halifax declining their mortgage.
The reason given by my estate agent was that Halifax are not willing to lend on a share of freehold block of more than 4 units. Ours is 7 units.
It seems an unlikely reason to me so just wondering if anyone has any insight into this. Of course there's always the possibility that it's a bolloney excuse.

[pochisoldi]

You need to search for the CML Handbook, then find the section for HBOS from the drop-down menu.

iSTR that HM Land Registry can't register more than 4 owners, of a title. If you have more than 4 units the usual thing is to register in the name of a company, and the "share of freehold" becomes a share in the freehold company.

So each "share of freeholder" owns a lease and a share in the company. (and one can't be transferred without the other).

That kind of arrangement is common or garden.

My money is on baloney excuse, or a s*** conveyancer who doesn't understand HBOS's requirements.

I suggest that you find out who the buyer's conveyancer was and then refuse to sell to any subsequent purchaser who uses the same outfit (make sure you tell your estate agent so they can vet/filter purchasers).

On the other hand, if your freehold isn't owned by a ltd company, you need to look at how the ownership of the freehold is structured or there will be more tears.

(Assumption: leasehold flat in E&W)

[mc2fool]

I had a buyer lined up to buy my flat until I discovered yesterday that they've pulled out due to Halifax declining their mortgage.
The reason given by my estate agent was that Halifax are not willing to lend on a share of freehold block of more than 4 units. Ours is 7 units.
It seems an unlikely reason to me so just wondering if anyone has any insight into this. Of course there's always the possibility that it's a bolloney excuse.

And the obvious question then is, if that's the actual reason, why doesn't the buyer go with another mortgage provider?

[Dicky99]

I had a buyer lined up to buy my flat until I discovered yesterday that they've pulled out due to Halifax declining their mortgage.
The reason given by my estate agent was that Halifax are not willing to lend on a share of freehold block of more than 4 units. Ours is 7 units.
It seems an unlikely reason to me so just wondering if anyone has any insight into this. Of course there's always the possibility that it's a bolloney excuse.

And the obvious question then is, if that's the actual reason, why doesn't the buyer go with another mortgage provider?

Well yes it had occurred to me but I'm interested in whether over 4 units in a freehold block is an issue for a lender and why.

[mc2fool]

And the obvious question then is, if that's the actual reason, why doesn't the buyer go with another mortgage provider?

Well yes it had occurred to me but I'm interested in whether over 4 units in a freehold block is an issue for a lender and why.

Well it most certainly isn't as a general rule but pochisoldi's point may have salience. Is your freehold held by the flat owners directly, or is it held by a company, either limited by shares with each flat owner being a shareholder, or limited by guarantee with each flat owner being a member?

[pochisoldi]

The top and bottom of this is that any lender wants to have solid security for their loan.
For leasehold this means things like:
* Having a clearly defined person who is responsible for buildings insurance (uninsured piles of bricks aren't good security)
* Having a clearly defined person who is responsible for maintaining the building (a crumbling building with a plumetting market value isn't good security either).

Note that by "person" I mean a legal person - this could be an individual, a company, or a trust.

The next thing they want is to be able to access the security for the loan.
This also ties into the freeholder - for example if the lease requires consent to transfer from the freeholder, it would be unusual for a lender to agree unless the consent is "not to be unreasonably withheld".

Other things that lenders require - for similar reasons:
* Providing notification to the freeholder of the lenders charge on the property, regardless of whether the lease requires it.

Different lenders have different criteria, hence the reason why there is a "Part 2" of the Lenders Handbook that guides conveyancers.
For the Halifax Part 1+2 can be found at
https://lendershandbook.ukfinance.org.u ... s/halifax/
For Halifax Loans Ltd:
https://lendershandbook.ukfinance.org.u ... loans-ltd/

My money is on an inexperienced admin person working in a conveyancing factory who seems to think that 5.8.5 of the Halifax bit of the Handbook means that Halifax won't lend on a lease+share of freehold where there are more than 4 units. Section 5.8.5 is to handle the scenario where the freehold is directly owned jointly by the leaseholders.
This doesn't apply where there are more than 4 units, (as previously stated) it is not possible to register more than 4 owners on a title at HM Land Registry, so its 99.9% certain that any freehold covering more than 4 units is owned by a company or a trust.

My advice to anyone selling and especially buying a leasehold property in E&W - use the conveyancing department of a solicitor. It will cost you more than a conveyancing factory, but you get the job done by people who generally know what they are doing, and know what they don't know and will automatically speak to a supervising solicitor when something unusual/different crops up, instead of throwing their hands in the air and/or providing duff information.

[Dicky99]

You need to search for the CML Handbook, then find the section for HBOS from the drop-down menu.

iSTR that HM Land Registry can't register more than 4 owners, of a title. If you have more than 4 units the usual thing is to register in the name of a company, and the "share of freehold" becomes a share in the freehold company.

So each "share of freeholder" owns a lease and a share in the company. (and one can't be transferred without the other).

That kind of arrangement is common or garden.

My money is on baloney excuse, or a s*** conveyancer who doesn't understand HBOS's requirements.

I suggest that you find out who the buyer's conveyancer was and then refuse to sell to any subsequent purchaser who uses the same outfit (make sure you tell your estate agent so they can vet/filter purchasers).

On the other hand, if your freehold isn't owned by a ltd company, you need to look at how the ownership of the freehold is structured or there will be more tears.

(Assumption: leasehold flat in E&W)

Apologies, I missed this post somehow. Ours is indeed a freehold owned by a Ltd Co. as you've suggested and each of us has 1 share. It would be disappointing to say the least to think that I'd lost the sale because that wasn't
understood by the parties involved.

[Dicky99]

The top and bottom of this is that any lender wants to have solid security for their loan.
For leasehold this means things like:
* Having a clearly defined person who is responsible for buildings insurance (uninsured piles of bricks aren't good security)
* Having a clearly defined person who is responsible for maintaining the building (a crumbling building with a plumetting market value isn't good security either).

Note that by "person" I mean a legal person - this could be an individual, a company, or a trust.

The next thing they want is to be able to access the security for the loan.
This also ties into the freeholder - for example if the lease requires consent to transfer from the freeholder, it would be unusual for a lender to agree unless the consent is "not to be unreasonably withheld".

Other things that lenders require - for similar reasons:
* Providing notification to the freeholder of the lenders charge on the property, regardless of whether the lease requires it.

Different lenders have different criteria, hence the reason why there is a "Part 2" of the Lenders Handbook that guides conveyancers.
For the Halifax Part 1+2 can be found at
https://lendershandbook.ukfinance.org.u ... s/halifax/
For Halifax Loans Ltd:
https://lendershandbook.ukfinance.org.u ... loans-ltd/

My money is on an inexperienced admin person working in a conveyancing factory who seems to think that 5.8.5 of the Halifax bit of the Handbook means that Halifax won't lend on a lease+share of freehold where there are more than 4 units. Section 5.8.5 is to handle the scenario where the freehold is directly owned jointly by the leaseholders.
This doesn't apply where there are more than 4 units, (as previously stated) it is not possible to register more than 4 owners on a title at HM Land Registry, so its 99.9% certain that any freehold covering more than 4 units is owned by a company or a trust.

My advice to anyone selling and especially buying a leasehold property in E&W - use the conveyancing department of a solicitor. It will cost you more than a conveyancing factory, but you get the job done by people who generally know what they are doing, and know what they don't know and will automatically speak to a supervising solicitor when something unusual/different crops up, instead of throwing their hands in the air and/or providing duff information.

This is really useful thank you. Looking at the clause you've referred to surely gets right to the nub of it. The distinction between owning a chunk of the freehold rather than being a shareholder in a company which owns the freehold and the possibility that the former has been mistakenly assumed.