Topic 13 Flashcards
James is hoping to buy a leasehold flat with a 20-year mortgage.
Which of the following statements is true?
a. A lender would typically insist on an unexpired lease of at least 60 years.
b. A lender would typically insist on an unexpired lease of at least 20 years.
c. James must pay the annual ground rent to the lender.
d. The flat’s value is likely to increase substantially as the expiry date of the lease approaches.
a. A lender would typically insist on an unexpired lease of at least 60 years.
James is buying a house and is applying for a mortgage.
Lack of vacant possession for the house is most likely to:
a. decrease the property’s value.
b. have no impact on the property’s value.
c. increase the property’s value.
d. result in the lender increasing the mortgage interest rate offered.
a. decrease the property’s value.
This usually means there are tenants in situ.
While negotiating the sale of his house, the vendor failed to disclose a dispute with his neighbour, which was resolved some time ago. After completion, the neighbour decided to resurrect the complaint with the new owner.
What rights, if any, does the new owner currently have against the vendor?
a. Automatic compensation.
b. None.
c. To reverse the purchase and recover all costs.
d. To take legal action.
d. To take legal action.
Which of the following properties, all in the same postcode, is most likely to be the hardest to sell?
a. A one-bedroom flat in a purpose-built private block.
b. A two-bedroom apartment in a complex for people aged 55 and over.
c. A two-bedroom starter home on a large estate.
d. A three-bedroom bungalow with a small garden.
b. A two-bedroom apartment in a complex for people aged 55 and over.
On which of the following properties is a lender most likely to agree to provide a mortgage?
a. A freehold flat.
b. A leasehold ex-local authority flat with 11 years remaining on the lease.
c. A leasehold flat in a converted mill with 75 years remaining on the lease.
d. A leasehold flat in a private block with 20 years remaining on the lease.
c. A leasehold flat in a converted mill with 75 years remaining on the lease.
Felicity wants to purchase a flat for her own use and she requires a mortgage to do so. The flat has a sitting tenant with an open-ended tenancy agreement with the vendor. The tenant is to remain in the flat.
This means that Felicity is most likely to:
a. be eligible for a commercial mortgage only.
b. be forced to pay a higher lending charge.
c. be declined by most lenders.
d. pay a premium price for the flat.
c. be declined by most lenders.
Few mortgage lenders will lend on properties with a protected sitting tenant because the occupant could gain an overriding interest in the property.
Leaving aside general property price inflation, it is typically true to say that the value of a leasehold property:
has no correlation with the remaining lease term.
increases as the remaining term of the lease reduces.
reduces as the remaining term of the lease reduces.
remains roughly level throughout the term of the lease.
reduces as the remaining term of the lease reduces.
