Assessing The Property Flashcards
A) difference between an easement and a covenant?
B) what is a flying freehold?
A) easements give others rights over the property (for access etc). Covenants impose obligations on the owner or restrict the owner.
B) part of a freehold that extends over or under another’s property but not next to or touching. Can be a problem as the land owner could fail to maintain their property resulting in damage to the property with a flying freehold.
When someone buys a leasehold property, what are they actually buying?
Buyers of a leasehold property are buying the right to lease the property for a number of years, at the end of the lease the property reverts to the freeholder.
Lenders tend to avoid lending on freehold flats because:
A) there might be difficulties in renewing the freehold
B) there is a limited market for this type of property
C) it may be difficult to establish liability for commonly owned parts of the structure
D) the owner can only acquire possessory title
C) it may be difficult to establish liability for commonly owned parts of the structure
Which of the following is true in relation to leasehold tenure:
A) a marriage value only applies to extending leases with more than 75 years left to run
B) lenders will only consider lending on leasehold property with an unexpired lease of 40 years or more
C) most lenders are happy to lend on former local authority high-rise flats
D) an owner must have held a lease for a minimum of 2 years before they can apply for a lease extension
D) an owner must have held a lease for a minimum of 2 years before they can apply for a lease extension
The cost of extending a lease reduces as the unexpired term reduces. True or false?
False
The cost increases as the term draws closer to an end
Joe is considering buying 1 of 4 more or less identical flats in the same area, all of which are valued at £150,000 but each has a different remaining lease term. Which flat is most likely to have the highest marriage value?
A) the flat with a current unexpired lease of 90 years
B) the flat with a current unexpired lease of 60 years
C) the flat with a current unexpired lease of 40 years
D) the flat with a current unexpired lease of 20 years
D) the flat with a current unexpired lease of 20 years
Paula and Joe live in a converted water tower in a very rural area. The conversion was designed by an architect to their specific requirements. If they were to sell the property, why might a lender have concerns about offering a mortgage on it?
Number of reasons -
There may be a limited market for this property - making it difficult for the lender to sell if repossessed
Construction method and materials used
It is likely to be difficult to find a lender prepared to lend on a flat above a restaurant. True or False?
Lenders are reluctant to lend on multi use properties such as flats above shops in a high street.
Which of the following properties is likely to be most attractive to a lender in terms of security:
A) a brick built, detached freehold Victorian property.
B) a brick built freehold Bungalow on a road with mining subsidence
C) a recently built leasehold flat in a purpose built block
A) a brick built, detached freehold Victorian property.
The subsidence would be of concern in the bungalow
Flats have less value than houses, the lease creates other issues
Which of the following statements are true in relation to the flood re scheme
A) insurers must reinsure flood risk through the flood re scheme
B) the premium the insurer pays to flood re depends on each property and how often it has been flooded
C) only properties built before 2009 are covered by Flood re scheme
D) the insurer may pass on the cost of its flood re premium in the premium it charges the property owner
C and D are correct
The net yield on a buy to let property always includes mortgage payments. True or false?
False
The net yield includes costs but not mortgage payments.
