MP warns over 125 yr leases on ex-Housing Executive properties
Gregory Campbell, a DUP MP for East Londonderry, has warned that over 4,000 homeowners in Northern Ireland may have difficulty trying to resell their homes, due to having purchased their homes under the Right to Buy scheme run by the Northern Ireland Housing Executive.
Campbell’s warning comes after a constituent raised concerns about the possibility of selling their property in the future.
The constituent was told by their solicitor that the property was already 30 years into a 125 year leasehold, and that they may experience difficulty trying to sell the property because many lenders are reluctant to grant mortgages on leasehold properties with fewer than 90 years left on the lease.
After taking up the matter with the Housing Executive, Campbell said that he discovered “more than 4,000 such properties across Northern Ireland.”
He went on to voice further concerns that “if this is not resolved it will prove almost impossible for these properties to be sold in the very near future as it will only be cash buyers who will be able to afford to buy them.”
A spokesperson for the Housing Executive confirmed that they are aware of the issue, and are currently exploring the available options.
Lauren Burns, Conveyancing Director at Wilson Nesbitt Solicitors commented:
“Mortgage Lenders each have their own policy on the minimum number of years left on a Lease that they would be willing to accept, with the average being around 70 or 80 years, or a minimum of 25 years above the term of the mortgage. Obviously, as the years roll on and the lease term diminishes there will be reluctance among purchasers and mortgage lenders to buy these properties.
“However there are options available, and we have just recently advised a client in a similar position that we can approach the Northern Ireland Housing Executive with a view to purchasing the freehold interest in the property. That effectively cancels the lease and removes any stumbling block for a future sale. This option wouldn’t be available to the owner of an apartment, but other remedies, such as obtaining a new Lease or extending the term of the current lease could be explored.
“Right to Buy homeowners should also note that this is only an issue for leasehold property owners. There are a large number of properties bought under the Right to Buy scheme that are freehold already so there is no such concern.”
If you want to discuss purchasing the freehold interest of your leasehold property, or are in the process of purchasing or selling a house, contact one of the conveyancing solicitors at Wilson Nesbitt by clicking here.
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