Retirement Income Alliance

The Problem With Not Moving House

by Bernard Seymour 1st May 2017

 BM By Bernard Seymour, Consultant at Linder Meyers Solicitors

My daughter and son in law have recently purchased their first home. As this was the first time my daughter had dealt with a solicitor, she asked me for some tips. I took this as a sign of her growing maturity, as she is very good at giving advice but rarely asks for it!

My wife Linda and I have moved several times over the years, when we were first married, with a young family, a growing family and no doubt we will move again to something smaller at some point. There are however many of us who have remained in the same property for many years. My colleague Suzanne's parents, for example, have lived in the same house for over 50 years.

This started me thinking about a couple of legal issues which can arise when you have lived in a property for some time.

The first relates to the Title Deeds of a property and where these are kept. Since 1997, the owners of all land and property purchased in England and Wales since that date must be registered at the Land Registry and their names entered onto the Register. If you have lived in your property before registration became compulsory, then your proof of ownership, or legal title could be unregistered. If it is, you can voluntarily register your ownership.

There are certain advantages for making a voluntarily application:

  • you have proof of ownership
  • it helps to protect your property from fraud
  • if you sell or give your property away in the future, it makes it easier to complete the legal process
  • there is a permanent electronic record of your ownership instead of Title Deeds which can get lost or destroyed:

A second issue involves residential flats. In England and Wales, the legal title of most residential flats is Leasehold. The reason for this is to make sure that any rights and obligations between the flat owners is the same and can be enforced for everyone's benefit. In legal terms however, it also means that you are entitled to own the flat only for the time that there is left on the Lease. This will vary depending on the term granted in the original Lease.

The problem is, as the length of the Lease decreases, so does the value of the property. If a Lease has an unexpired term of less than 80 years, it is unlikely that a potential buyer will be able to get a mortgage therefore greatly reducing the sale value of the property. It is also unlikely that the property could be used for the purposes of Equity Release.

To avoid this problem there is Legislation which in some cases means it is possible to extend the Lease. In that case, the new Lease will be extended by a further 90 years in addition to the time left on the original Lease. Not everyone can apply, and there is a premium payable for an extension. It is however, something to look into, if this applies to you.

It has in the past been the norm for couples to jointly own a property as joint tenants which is where both parties own an equal share and when one dies the other automatically inherits the other's half. There is another way you can own a property which is as tenants in common where the ownership does not have to be in two equal halves and on the death of the first, the property does not automatically pass to the survivor, but to whomever is named in that person's Will. There are advantages of both ways of ownership. The important factor is to consider your own personal circumstances and do what is best for you.

If all of this seems too much to think about, then now may be the time to consider a move! We are currently running a special offer on our normal fees for members of RIA and their families for buying or selling a property. If you would like a free no obligation quote, then get my contact details from the members’ area.