Tenant used to own property

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  • theartfullodger
    replied
    & Beware you may already now be on the National "Hunter" system that records persons with loans/credit deals that were... err.. based on might appear to be "iffy" info.

    Designed to flag warning red flags to any lender when later approached.

    See...
    https://www.nhunter.co.uk/howitworks/

    Leave a comment:


  • loanarranger
    replied
    JpKeates is correct on his understanding of granting Vacant Possession but not adhering to the requirement. Don’t kick up a fuss with TMW as you might not like it if you were asked to repay the mortgage, unlikely but never take such things for granted.

    Leave a comment:


  • jpkeates
    replied
    Originally posted by dizzymill View Post
    All because computer says no instead of being looked at as an individual.
    Well, not really.
    You did something that's not legal and were lucky not to have been caught before now.

    I have a lot of sympathy, but it's not a problem because of some stupid technicality.
    The contract for the sale/purchase of the property can be challenged because the conditions almost certainly weren't complied with.
    For example, the seller would have had to agree to provide vacant possession, and they didn't.

    Leave a comment:


  • dizzymill
    replied
    Well obviously this isn't the situation in my case as she has been there for 16 years and paying below market rent. Looks like she will have to leave now though if the property can't be mortgaged. All because computer says no instead of being looked at as an individual.

    Leave a comment:


  • Mrs Mug
    replied
    Originally posted by loanarranger View Post
    For those working or linked to the Buy to Let market will recall the adverts in local/ national newspapers advertising immediate funds / investors willing to buy such property offering prices below the open market value but allowing the unfortunate vendors to remain in their homes.
    I recall instances where after a specific period had elapsed ,the purchaser ( landlord) increased the rents beyond market norms in order to force tenants to vacate
    And this is why we became landlords, to stop the possibility of this happening to a relative.

    Leave a comment:


  • loanarranger
    replied
    I have undertaken research into what is called “ Sale & Rent Back” there are only three lenders whose criteria might permit such an arrangement, one is a lender of last resort insofar as knowing they have a stranglehold on such cases the rate of interests is significantly higher than what you were applying to TMW. Whether a broker can get a lender to accept a former S&R given the time she has been the tenant is uncertain and because of the time taken to undertake such research the broker would definitely want to levy a Consultation Fee on the basis of the success being doubtful

    Leave a comment:


  • loanarranger
    replied
    As I mentioned criteria was far more lax than it is today, having spent 11 years with the leading portfolio lender it was obvious that many lenders seeking. Foothold in the BtL market had little appreciation of the significance of such transactions but the FCA had an important input into the potential issues of such transactions and as a means of sanitising the market from such questionable sales marketing and the vulnerability of distressed sales.
    For those working or linked to the Buy to Let market will recall the adverts in local/ national newspapers advertising immediate funds / investors willing to buy such property offering prices below the open market value but allowing the unfortunate vendors to remain in their homes.
    I recall instances where after a specific period had elapsed ,the purchaser ( landlord) increased the rents beyond market norms in order to force tenants to vacate and then subsequently realise the equity which had been achieved by buying between 70%& 80% of the normal value and any subsequent capital growth. Is there any wonder why lenders ask such questions today!

    Leave a comment:


  • dizzymill
    replied
    This was never flagged up when we bought the property all those years ago and our solicitor never mentioned it. Would never have bought it and let her remain in it if we knew it wasn't allowed. Not sure what we can do now. Seems very harsh to have to give this elderly lady her notice just so we can remortgage!!

    Leave a comment:


  • loanarranger
    replied
    Kape65 you ask how the lender would know the tenant was the former owner, quite easily it cost the simple fee of £3 by a Land Registry Charge, possibly cheaper on a corporate level. It declared the bane of the purchaser and the previous owners.

    Leave a comment:


  • theartfullodger
    replied
    Herewith a link to sale & lease back points - eg 5 year fixed term minimum etc etc..
    https://england.shelter.org.uk/housi...t_back_schemes
    &
    https://www.handbook.fca.org.uk/handbook/MCOB/4/11.html

    Out of interest, appreciate you paid asking price, how did that compare to typical market prices when you bought, please??

    Leave a comment:


  • doobrey
    replied
    Sale and rent back is regulated under the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001, therefore I presume this should not have happened in the first place.

    Tricky situation, though, since the incentive now may be for the LL to issue the tenant with a Section 21. In the name of their own (i.e. the tenant's) protection.

    Leave a comment:


  • loanarranger
    replied
    There is a question on most mortgage applications asking if the tenant was the previous owner? In the Wild West days this type of activity was marketed by a number of firms dealing in distressed sales with the vendors remaining in situ but as the tenant . A little like shutting the stable door after the horse has bolted. So unless the applicant intends making a fraudulent declaration to the lender Thea iLife of raising a mortgage or in this case is extremely remote.
    Like most practices previously promulgated by Property experts/ Investment clubs these loopholes have been closed and I for one have no empathy for their demise.

    Leave a comment:


  • Kape65
    replied
    How do TMW know that your current tenant is the previous vendor?

    Leave a comment:


  • JK0
    replied
    Was this an interest only mortgage, then? Have you no savings to pay off the loan?

    Leave a comment:


  • landlord-man
    replied
    Would this be known as a Home Reversion Plan these days? or is that completely different?

    Leave a comment:

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