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If a property is a Buy to Let or any other commercial property such as an office space, industrial unit piece of speculative land, anything for commercial gain, then the Law of Property Act 1925 is usually part of the terms and conditions of that contract, so it’s irrelevant really how old the property is.

What’s more relevant is the type of property is whether it’s commercial or residential. The Law of property Act 1925 applies particularly only to commercial assets. As long as the off-plan properties are considered to be commercial, they are still applicable to the Law of Property Act 1925. But obviously, as I’ve explained, if somebody’s looking to live in it as a personal home and then the law Property Get Act 1925 does not apply in those circumstances.

Is the clause of repossession via LPA receivers included in all of the mortgage terms and conditions?

No. It’s only applied to commercial assets by to let office industrial. It doesn’t apply. If you look on mortgages where it’s regulated mortgage, where I’m looking to live in the house, then that terms and conditions around the Law and Property Act doesn’t apply or noise. It put it in that contract, not as far as it is travel, then it’s in all across all the terms and conditions. So that’s something that we should actually be very comfortable about – that all contracts are not the same. Properties that are purchased by a residential mortgage or a regulated mortgage do not have the close for the LPA receivers. Something that we should all be aware of is that the Law Property Act 1925 is not found in the terms and conditions on the mortgages that are regulated. That’s by news. Okay, we’ll move on. So, you’ve got a new property and you’re saying it won’t make a difference. If it’s new or old, there will be the actual still apply.

Now, how is the act applicable then?

You’ve got a new build; you’re living in it and you decide to put it on rent. if you’re living in it and you decided to put the property on rent because you’re going away for work and you want to pay your mortgage and by letting the property, it allows you to go away for work and still be in a position to pay your mortgage.

Can you change a property from a Buy to let into a residential?

If you decide to actually change a buy to let property to a residential property because you decide now you want to live in it, you would need to get, or vice versa) a residential to commercial. If it’s residential and you’re looking to let it out, then you need to get something called consent to let from the bank. You may need to resign contracts to get the terms of the contract to be more suitable for commercial purposes.

Usually, the payments for buy to let properties tend to be higher than a typical residential property, and also the loan to value tend to be different as well. So, you may have to even bring the debt down on the property, because normally on residential purchases, purchases are based on loan to value. And if you are trying to convert it to a Buy to Let property, there’s a lot of loopholes you got to go through with the bank to get them to agree to the change

  1. You’d have to sign new terms and conditions?
  2. Wouldn’t that mean you’d have to go through a new credit surge?

You’d have to put a fresh application.

  1. What would happen with the original mortgage London, which is maybe 20 years or 25 years?

That stops but the process is different with each bank is very different for every bank. Certain banks are quite rigorous about what they do when it comes to flying commercial terms, and the banks are a bit fairer about it.

Just so that we cover everything comprehensively, one should assume that they are going to give you commercial terms that you need to sign and that there will be an issue around your lending in amount that you got to pay, and you will most likely have to pay more because you’re now on a on commercial terms as opposed to a regulated mortgage, which is the money is a lot cheaper. The bank may assess the loan to value ratio as well, to assess if the numbers were to stack up. All they want to do is make sure that the mortgage is being serviced with talents rather than having to dig in their pockets because they’re not going to be living there.