Kate Mellor

Registered with Property118.com
Friday 27th November 2015


Trading Status

Insures properties through a broker recommended by Property118

Latest Comments

Total Number of Property118 Comments: 374

Kate Mellor

13:32 PM, 11th July 2020
About 3 days ago

Splitting into leaseholds on freehold building to refinance

Hi Nick,

I've also done this, and it was hellish!

At the time we had a business loan for the group with Yorkshire Bank and they had given us a deadline to refinance as they were leaving the property sector. It was early post-crash and there wasn't anybody who had stepped in yet to take up the slack so our only option was individual buy to lets. Of course we already had borrowing on the block as it sounds like, you do also.

Your first problem with this is that you can't transfer the freehold before you have repaid the outstanding borrowing and you can't remortgage unless you've transferred the freehold. As Puzzler points out, you won't get a lender to lend on all the leaseholds in the same block and so you will have a number of different applications pending with different lenders and different panel solicitors all of which have to complete at the same time. This also relies on ALL of your new lenders agreeing to a simultaneous transfer of the freehold and remortgage. We found that one of our lenders insisted on the freehold being registered prior to the remortgage. We then had to remortgage another property to raise funds to pay off the balance of the existing freehold mortgage to allow the freehold to be registered to the new company by HMLR and then complete on the remaining mortgages. Alongside that, we had to pay a separate solicitor to create the leasehold paperwork for each individual property. It took many months and was expensive and stressful! I learned an awful lot from it though on the plus side!

The easiest way, as Caroline suggested, is just to create a company, which is what we did. The freehold is generally not especially valuable (ours certainly wasn't) and so there shouldn't be any tax to speak of.

By the time we came to do the second block, Paragon had a product which was suitable and we just remortgaged the whole freehold block with them. It was simple and quick. Paragon have been in the business for a very long time compared to a lot of the non-high street lenders and they are pretty good. We've had products with them for almost 30 years, trouble free.

You should do your sums before committing to this process. Remember you will have to pay a separate application fee for each remortgage application, solicitors fees, for each one, architects fees for the site plans, individual property plans and levels, solicitors fees to draft up the leasehold agreements, solicitors fees for transferring the freehold. You will also have to separately remortgage each property every 2 - 5 years depending how long a fixed term you go for and there will be an arrangement fee for each of those each time, unless you roll them over into a new product with the same lender. So all those individual costs may end up being more expensive than the loan you currently have. Not to mention all the extra time and effort you will have to put in compared with only having the one loan to administer.

Obviously if you plan on selling off the properties individually then you may ultimately need to create the leaseholds, but that's all part of your decision making process.... Read More

Kate Mellor

15:23 PM, 3rd July 2020
About 2 weeks ago

Are two rent increases within a year possible?

It's my understanding that you can only increase rent after the fixed term has ended; and then, only once per year. Unless you have, with the tenant's agreement, made some improvements to the property with the understanding that the rent would be increased as a result. For example, if you agreed to fit a new kitchen and you gave the tenant the option that if you fitted it you would increase the rent to £X per month to reflect the increased rental value due to the new kitchen. The key here is the tenant must agree, so they will presumably expect something in return for it.... Read More

Kate Mellor

14:47 PM, 29th June 2020
About 2 weeks ago

Urgent tenancy help required please?

Hi Jane,
It sounds like you had a fairly casual arrangement with your landlord which was, at the time, mutually beneficial and you may therefore have no wish to cause your landlord any problems, but you are understandably worried about your own position in all this.

You have nothing to worry about. The fact that there is no written tenancy agreement is neither here nor there. You have a tenancy and your landlord has certain obligations towards you. One of which is that the minimum notice period is one month. I am not even going to start in on the potential issues your landlord may have in regards his/her legal obligations, but i will mention that the notice should be issued using a prescribed form in order to be valid...a text is not it.

You don't need to know all the ins and outs, just the fact that the landlord has no choice but to wait for you to move out. I would write to them explaining that you will be moving out once you complete on your purchase, which you believe should be x date, and that you cannot guarantee the date at this stage, but you will keep them informed.

If your landlord has set a completion date before he/she can give vacant possession they could be in a world of pain if you are still in the property when that date comes. If that is the case it may be well worth their while to pay or contribute towards your costs to relocate into temporary accommodation for the final few weeks, but that would be at your discretion.

If they argue that you are on a holiday agreement and not an AST, the fact that they have transferred the council tax into your name clearly shows the intention to create a tenancy, which, along with your regular rent payments and exclusive possession of the property makes it a tenancy. Your tenancy is an assured shorthold tenancy by default which falls within the protection of The Housing Act 1988, which requires the landlord to follow certain clearly defined procedures in order to regain possession of the property, which your landlord has not yet done. The notice you've been given is therefore not validly served and so must be served again validly (which is a whole other conversation) and the notice period, (one month), must start again. This should hopefully be long enough for your purchase to complete and allow you to get moved out.

I hope you can come to an agreement with your landlord which works for you both. If they can delay their completion to work with yours, or help compensate you to find something appropriate and temporary for a few weeks that would be the ideal scenario, but if not, perhaps you could direct them to this forum for some advice and information on their position. It may change their mind regarding their willingness to accommodate your needs.

If you need any more advice as this progresses, please come back and ask. Also, it would be good to know how you got on if things go well.

Kate... Read More

Kate Mellor

9:19 AM, 23rd June 2020
About 3 weeks ago

Still working on the new claim form N5B - give me strength?

Reply to the comment left by Gemma at 22/06/2020 - 23:36
I suspect this is just one of those govt balls-ups that don't actually have an answer. This is a new version of the form which was recently snuck out with no fanfare at all. The previous version didn't ask about the govt h2r guide and it didn't ask for every copy of a required document throughout every tenancy of the occupation, just the most recent tenancy.
I don't think a solicitor can give you a definitive answer on this one and we will have to wait for the powers that be to either alter the form, or produce a guide before we know for sure.
With all the extra organisation required by courts for telephone hearings at the moment, I'm not holding my breath for an answer from them, but it seems like the logical thing to do. Fingers crossed I guess...... Read More

Kate Mellor

11:48 AM, 22nd June 2020
About 3 weeks ago

Still working on the new claim form N5B - give me strength?

Reply to the comment left by Geoff at 21/06/2020 - 20:12
Hi Geoff,

I've emailed my local county court enquiries email address and asked the question for you. I seem to recall that they can give advice on form completion, but I'm not 100% certain. If and when I get a reply I will post it here for you.

Personally in your position, if I was unable to get a satisfactory answer on this, I would simply enter the first date served and then submit copies of all three versions headed: 'H', 'H1', & 'H2'. I would also write across the top 'Date Served to Tenant: XX/XX/XX'.

I don't think the answer to this question is a deal breaker. As long as the information is provided for the court to see that you have complied with the relevant regulation they will be satisfied. But, that is just my opinion and how I personally would proceed.... Read More