Complicated Purchase - Overage Agreement & Two Purchases Same Time

[max99]

Hi all, 

 

I'm new here but having read so many useful threads this looks an awesome place to ask for some advice  

 

I'm trying to buy a house for my family but its turning very complicated. The house is semi-detached and has a large garden but half of this garden isn't owned by the same seller of the house.

 

• We're purchasing the leasehold house with around 75 years left from Seller A
• From Seller B we're purchasing the freehold to this house and a bit of land that makes the house's garden a good size.
• Seller B wants to put a 50% overage on the land on the basis it can't be severed from the house
• We will only be using the land for garden, no plans to ever split it, planning on it would be extremely difficult to get

 

The sale of both will complete on the same day at the same time by solicitors.

Questions,

• We ideally want to get a mortgage on the property as a freehold property with the land being included. We've spoken to 2 high street lenders and both have said they'll likely not lend as it'll be seen as two separate transactions, anyone know if we're going to be able to do this? 
• Will the overage on the land be an issue for us in mortgage terms?
• Will the overage and if the house and land are on different titles affect the future sale of the property? 

 

Finally, there may be an option to change the overage to a covenant... would that help?

Sorry for so many questions, just trying to get my head around it all (I have a solicitor who i'll also be asking this too, but he's hard to get hold of!) 

Thanks in advance for any help

[Faz]

A covenant would be simpler and more readily understood by lenders.  You would have thought that the lenders would find the prospect of resolving the leasehold title appealing and, as everything is back to back, it would be fairly simple and a single transaction for them - ie send all completion monies to your conveyancer in one go.  Speak to more lenders I would have thought.

[Stewpot]

Is there any chance of the overage being extinguished after a certain time? I could maybe live with a ten year clawback, but not one in perpetuity.

 

If the solicitors can get their act together, and combine both titles into one freehold at the time of the transaction, then I would guess that you're in with a chance of getting a mortgage. I can't comment whether an overage clause will affect things, but if wouldn't surprise me.

 

I think I would be seeking out not only a good solicitor to discuss this with in advance, to find out what is possible, but also a mortgage broker to help with the money. In my experience, a good broker will have access to specialist financing, cheaper loans, will know and understand the variety of deals available, many of which are only available through brokers, and will, to some extent, act as an advocate for you when dealing with the finance company. The good ones are worth every penny of their commission, and do not charge for a consultation.

[Temp]

Have you checked that the asking price for the freehold is reasonable? These days you can get the leasehold extended to 999 years effectively making the freehold worthless if the ground rent is low. The cost of the extension should be similar to the freehold I would think.