@Moons a good example of relying on what the vendors tell you or rather omit to tell you. As someone who deals in property matters on a daily basis, I am slightly surprised when read things such as this suggesting they are freeholders, clearly they are not but leaseholders. I can only assume they are somewhat naive/trusting/stupid to end up in this position, most probably they accepted a whole range of incentives and were strongly encouraged to use the developers preferred conveyancing solicitor as their adviser? Probably couched in the terms this is the sellers standard contract? I wouldn't sign any document until I or my own solicitor had read through all the terms, although I have never seen one of these developers contracts it must be reasonably clear if you read through the first few pages that the document is a lease for a number of years and contains certain obligations i.e. for the management company to upkeep and for the leaseholder to pay for those works. They will have had to sign this before proceeding (and have it witnessed) did it not raise any red flag? In the village a large developer is building a development of 80 houses, for my own personal interest I just looked on their website and right move. What I found most interesting was they did not state tenure i.e. freehold or leasehold, they did however list whole range of incentives to buy, part exchange/contribution to fees/deposit arrangements/stamp duty etc. The incentives hide the true market value of those properties. Just to make sure I wasn't being harsh I looked on Rightmove at an individual property being marketed nearby that clearly showed that it was the freehold interest that was being sold. Not misrepresentation by the developers, but not transparent.
I absolutely get what you all are saying and part of the problem is indeed naivety for sure. I had hells bells work getting a mortgage forty years ago, mainly because I was a self employed builder with very little respect for paperwork and book work etc etc Yada yada I would have signed up with anyone to get on the housing ladder. In fact I only got a mortgage because the person selling was a broker and sorted the paperwork side of things and got the mortgage. This person did everything including a direct debit for the mortgage and sorted me a solicitor etc etc. The solicitor said to me that there was a strong possibility of a ring road being built near us but I still ploughed on as I had little chance of a mortgage elsewhere (so I thought) And yes we now have a lovely ring road and the mortgage has been long payed. After we bought the place, we were modernising and that went on for about a year or so , then we would work on it on the weekends. On one of these visits there was a letter waiting for us from the building society asking us to pay our mortgage or we’d be repossessed??? Apparently something had gone wrong with the direct debit and we hadn’t payed a penny apart from the deposit And that’s how little I knew about buying houses, how little concern I had for bank statements and paperwork in general. After that, the lovely Mrs Ozziedog would make the trip into town to the head office of the society and payed in cash with a little book for over ten years until we decided that maybe that wasn’t such a great idea There’s a fab young lady that works in the same bit as me in Asda and she is desperate for her own property instead of renting, her and her partner remind me so much of how dim I was with all that stuff. The only way for them now, seems to be a part ownership type deal, but I know they’d sign up to anything to get out of their little rented flat and get some place with a bit of garden or green space for their two little ones, and perhaps some separate bedrooms too would be nice. But getting a deposit together with working in a supermarket and two kids and paying rent must be really tough. There’s a local scheme that she’s heard of and they’re off to apply to get on it quite soon, but it really is beggars choice especially as he sounds very much like me being self employed and paperwork mentality of a two year old . Ozziedog,,,,, Let’s hope it goes well.
The Countryside development is 49 homes and I'm sure they didn't deliberately misrepresent, they had no legal obligation to tell buyers all the facts. Most folks bought off plan and came from London. so had no local knowledge and it seems most used the developer's stooge solicitors for the purchase as part of the range of incentives. The planning application is on the Council's website for all to see and the landfill and water issues are all openly shown, but its not Countryside's fault if their buyers don't do proper searches. Also none of the new residents picked up the adjacent planning applications for a further 159 and 146 new homes. The developer didn't mention that of course. The developers of new builds set up their own management companies and collect the fees which gives them a substantial income stream for ever and nothing to stop them charging what they like as the fees are not capped. I blame the buyers for their naivety and ignorance. Their homes may become difficult to sell in the future.
it sounds like the developers solicitor is sailing close to the wind here. Any conveyancer acting on behalf of a buyer has to conduct due diligence to make their client aware of what they are purchasing. Searches should show the land was contaminanted, should show the planning app for the additional house - the buyers rely on the legal folks to act in their best interests. Stitch up sounds like. The free legal option on remortgage deals and purchases is in my experience never to be taken up. Once on a remortgage the free legal team tried to put the mortgage charge against the wrong property (which we also own). They got upset when I called them useless on the phone... their services were not required any further and the chap we have used for years took over the process.
Out of interest what is the cheapest house on that development. On the development here the cheapest is around £470k I know if I was spending that sort of money I'd want to know the ins and outs of it. @mgbman the developer then sell on the freehold of the whole site to an investor who then pockets the money. @Ozziedog don't worry those of us of a certain age have all been there, trusting in other people to provide us with the right advice, I haven't always worked in property so there was a time I didn't know either. I don't know much about the shared ownership part rent/part buy but like everything it depends on the terms of the agreement, I think they allow you to purchase a greater part over time so you own more rent less but exactly what you are buying etc I don't know. @Mattlad undoubtedly very close but they usually have a way of extracting themselves from the Marmite ... over the years I have learnt to trust no one. The problem of course is most people don't deal with solicitors on a regular basis so they are sometimes worried about asking questions for fear of looking silly.
Yeah, that does sound like the sort of thing I’ve heard of. Because of yourself and the other good bods on here, I may put up the details or the name of this plan once they’ve been and had a look and told me . Not that I’m asking for guarantees, but more like blatant things for this couple to watch out for like some of the things mentioned above. I remember some of the ‘other’ gas companies doing similar things and holding large estates to ransom by installing pipes cheaply for developers then tacking large running costs on to customers bills but also legally not allowing customers to switch suppliers because of contractual reasons that you just wouldn’t/ couldn’t be aware of. Ozziedog,,,,,,,,, just business to some
Usefull if you want to check the chances if somewhere flooding before moving there.. https://flood-warning-information.s...66.187766429.1611314131-1953891736.1611314131 Sent from my SM-G960F using Tapatalk
So, the issue with the current residential market, having walked the journey myself late 2019 is kind of along these lines. The buying part: Talk with Mortgage vendors - get a ballpark indication of what you can afford, this drives your price range (when factoring what 'profit' you may or may not have on your current gaff). Start looking on various housing websites - book some viewings. We had 3 vendors pull their properties from the market, no apparent reason - wouldn't have minded but we bought 170 ish miles from where we were so there was at least a couple days of wasted venture. Find a property - engage conveyancer. Do the bit most of us on here would do - look on land registry site for deeds, planning permissions, other local planning, news items for the road. Visit the property at different times of day, different days of the week - obviously not many people do this, but we are all switched on on this site. Also - on a new build, this is a waste of time. Make offer - in my case, then have to balls about with the bank as mine will only give you a mortgage in principal for an actual address (this lag lost us two houses, and nearly lost us this one as you are bartering somewhat blind if you can't share the offer on the same day). Conveyancer then starts searches - and this can be where the rot starts to seep to the surface. I also paid for two structural surveys at a grand a pop as tow of the houses we wanted to action were Victorian - bullet dodged on both thankfully. Wait around 8 weeks for all the info from their searches comes in - at any time you might get gasumped, the vendor pulls out, your sale falls through, someone else's sale falls through. This is the part where people make stupid and or desperate decisions and get had over. The selling part: Get a couple of estate agents around to value it, tell you their rate etc. Choose one. They then take pics, bang it on the market. Have the usual first week of people with bugger all better to do and who are too tight to pay for tickets to the cinema waste your time showing them around. 'Enjoy' a couple of stupid offers being rejected. Have a couple of people that make a serious offer - then lose their own sales and withdraw. Finally sell the thing. Fill in that house and contents document where you reveal that actually all the light fittings, some of the outbuildings, even the patio (have seen this done) aren't actually part of the house sale. Enjoy a waiting period of 8 to 12 weeks whilst the conveyancer ballses about with searches. Wait on the mortgage survey people to agree valuation. Most of the uncertainty, and where the deals collapse and the stress is ramped up occurs at the searches and agreed survey stage - the time lag, the new information etc. You are so committed by then that many people are either desperate, or just assume it will be ok so concede things that most of us in the cold hard light of day wouldn't dream of. HIPS were proposed to do this: Independent survey up front - that had a valuation nominated. Independent Energy survey up front. Local searches conducted by independent solicitor - though they might be engaged by the vendor. The pack built by the HIP Manager, also independent. If the vendor changes any detail in the pack* - you sue them.. Imagine going to view a house where you, and anyone else have all that information up front - you can fire it to the mortgage company and if you wish to barter the house price you can. You know a lot of the issues up front (of there are any) and can engage more detailed surveys and searches if you wish. But the buying part should have little cost and no massive surprises. All of the above you pay for as the buyer (bar the HIPS manager at around £1000 a property ish) anyway. So this way around you pay for it as a seller - it also stops ballbags putting their property on the market to gauge its worth and wasting everyone's time. The RICS objection was primarily based on they would only get paid for one survey per house - not the three or four they can get on some properties. I agree that there is some complexity on how long a pack is valid for (but what exactly would change other than the property price market, the local searches wouldn't, mineral rights, boundaries etc.) * in 2004 the HIP would have sat with the vendor. Imagine if that was centrally held, which we can now do easily, and a link shared on the estate agents webpage. It weakens the seller position somewhat - but then enhances is when they are the buyer. So the only real objections I can see are, the cost of the HIP Manager and people not being happy with the crappy things about their houses being shared with people up front as opposed to much further down the line where people are desperate and can't re-negotiate the house price. I believe HIPs stalling the market objections were and remain utter tosh - that time lag of 8-12 weeks where all the crap happens mostly disappears. As for RICS objecting to the danger of surveyors being 'bought' - they can be right now and surely that's a case of RICS getting their own house in order.
The HIPS proposal was fully independent - the vendor doesn't fill anything on, other than the building and contents list of what is actually in the sale.
And they do ... they investigate where necessary, disciplinary hearings occur and action taken against surveyors where they have transgressed, fines, suspension and dismissal from the organisation. Without your letters that's the end of your surveying career. You can check this on the RICS website where they provide details of how to complain and details of the disciplinary hearings that have been undertaken. On the independence thing let's just say some surveyors and solicitors are more thorough than others. On the point of valuations completely disagree, markets have the potential to change quite quickly ... for example driven by C-19 London is now less attractive and rural locations more in demand, a January 2020 valuation would not be worth the paper it was written on. Actually I don't have a clue exactly what has happened in the residential market but then its not the one I operate in, my expertise is elsewhere. I wont bother answering it all as you clearly know property better than me.
I agree that some solicitors and surveyors have some dodgy business practices and its an imperfect world - just funny RICS are stating there is an issue with their own profession like its out of their hands. Also, agree regarding price fluctuations - but rather than push an updated HIP, why not let the market decide with whatever offers people are willing to make? Fair enough. You asked me why I thought HIPS were a good idea, I spend time and thought answering a question you asked - I've not in the slightest asserted I know anything more than you do, but how else am I supposed to answer a question YOU posed if I don't draw on my knowledge and perspective? Why ask the question in the first place
The problem is most lenders want some assurance so if the market has changed then they will want the valuation updated. They also like to choose the valuer which the HIP prices doesn't allow for.
That makes sense, could that not be fixed by valuers being approved by a number of lenders, or would that introduce a monopoly by the back door?
Each lender (bank) will have a panel of valuer firms who they will use. To get on the panel you will be expected to demonstrate some competency first. There will be an overlap in so much that the valuer firms will tend to be similar if not the same. They like to be in control and decide who will value. At least that is my experience in the commercial property world, I'd expect it to be the same in the residential world.
So the lender wants someone firmly with their interests at heart to value a property, and wouldn’t necessarily trust someone independent? Is the lender valuation often so far out to that a borrower wants to offer for the property? I can see the issue, I don’t know what proportion of lost deals it causes....if it’s a low number overall, would it be insurmountable?
I think it's more about having structure to be able to process a volume. If a random valuers turns up then the lender would want/need to check their credentials, not only to understand that they know what they are doing but also to ensure they currently have sufficient professional indemnity insurance and are going to be around in a couple of years if a claim turns up. Would undoubtedly increase costs.
Wouldn’t that cost be offset by savings in lost venture? Lenders wouldn’t have to spend as much time on raises loans that are then cancelled?
I don't actually understand what you mean, perhaps I am being thick. This is a massive volume game last year there were about 800,000 residential sales in England and Wales, admittedly less than 50,000 in Wales. This is down on the previous year when approximately 1.2 million. Anyway they are lending the money so can choose what to do to keep the process streamlined and have someone accountable when things go wrong.
So one of my points regarding HIPS was that you make an offer, and balls about with searches - in parrallel you have the lender send a surveyor to establish if they believe the proprty is worth what you wish to borrow. I don't know the figures, but I imagine that sometimes that survey doesn't agree, so the survey and admin is lost venture as the borrower or lender can't proceed. I suspect that there are savings to the lender, but I am unsure if they are significant enough to cover the risk we mentioned earlier of lender control.
