The growth of leasehold ownership within the UK property market means that lenders are increasingly exposed to the risk posed by conflicting legislation under the Housing Act.
Leasehold has traditionally been the form of ownership for properties in communal buildings or forming part of an estate, but more recently housebuilders have started to sell new-build houses as leasehold properties. But this leaves lenders more exposed to the risk of forfeiture of lease. As the rent thresholds stated under the Housing Act have not been reviewed for many years, and with ground rents having increased during the same period, more long leases on residential properties are ‘technically’ at risk of being caught by this conflicting legislation.
Our Forfeiture of Lease (Housing Act repossession) indemnity provides a solution, protecting lenders against potential financial loss under their security. Our policy covers the lender for legal costs in defending a claim, and any shortfall in the outstanding debt under the mortgage, if the landlord repossesses the property, under the Housing Act process, due to non-payment of ground rent by the borrower. Premiums start at just £42 for a policy limit of £50,000.
To find out more about any of these stories, contact our underwriters on 01603 761515 or email enquiries@isisconveyancing.co.uk, or visit our products page.