What’s the real impact of the leasehold scandal on mortgage applications?

The news of leasehold scandal has broken out throughout the United Kingdom, and it has arisen a new area of concern among long-time home as well as first-time homebuyers. It has been speculated that the reports of people requesting for mortgage applications have been blocked as a result of rising ground rent, and it demonstrates that the leasehold scandal continues to affect the financial situation of the homeowners.

While the concerns regarding the leasehold scandal as well as leasehold homes has proliferated considerably over the years—it was not noticed up to last year. Keeping the leasehold agreements in consideration, the tenants were persuaded to pay double rent on a 10-year basis. Furthermore, they were required to pay an outrageous fees amount to buy their way out of the freehold.

It led to the occurrence of a crisis, and it demanded a resolution where the leaseholders were left with the houses that couldn’t be sold to a contender. The government took the responsibility of processing the sale of the leasehold houses, and the plan was also supplemented with the addition of residential leaseholds to it.

However, the government is focused on taking measurements to eradicate the occurrence of the problem in the future, and it may require the current leaseholders to pay the pending penalty. Let’s not forget that when the depth of the issues reached its heights—the lenders became reluctant to proceed further with the mortgage applications on the land affiliated with growing ground rent. One should always remain updated on the current situation to prevent becoming collateral of the leasehold scandal. The lenders are more likely to investigate your background to make sure that your property is not build on a growing ground rent at any cost.