No mortgage for flat in block more than 5 storeys high?

Spark

A working collegue of mine is trying to buy a property. He has been at it for months now.He has got some difficulties finding a mortgage lender who will give him a mortgage as he is in his 50's but one bank told him they would give him up to £100,000 mortgage.
There is a flat in my block on the 1st floor which is for sale and is in his price range, so I got him the details on rightmove, as well as the details of 2 other flats.
He got viewings for 2 of the flats, he viewed one already and was really interested, so much so that he called his mortgage lender to see whether he could get £90,000 mortgage as he could cover the difference with his own savings.
He was told that because the flat is in a block more that 5 storeys high, they would not give him a mortgage for that property.
I don't understand the thought behind this. Does that mean that the people who bought a flat in a towerblock in the past will find difficulties in selling their properties if the interested party don't have cash to pay for it?
Why would that be? Is it a general rule or is it only because of his age, or something else?
Poor guy, he thought he found what he was looking for, now this.......

princeofpounds

Might be due to the fact that the fire brigade hoses only go so high... I know this was a problem for some university tenants near me when they went on strike and everyone from floor 6 upwards was moved out for the period.

Spark

I did think that the properties seemed cheap, obviously if they ever intend to refurbish the block, as an owner of the flat he will be asked to pay his part. He should know that.
Something he mentioned is that other lenders wanted to lend him the money, but only on a part rent/part buy scheme, which he doesn't want.
I think there is something going on, they never were any flats for sale in my block for years, and all of a sudden 3 flats were advertised for sale in a year. Like people are trying to get rid of them for some reason.

PasturesNew

Usually it's cash buyers/BTL investors that will have bought the flats in the past. Cheap to buy, good rental income.

The thing is, as a council block, what if he gets to the day before he is due to retire and they decide to double glaze the whole block, fit a new facade, refurbish any balconies/walkways and tarmac the parking area... he could find he's about to retire and they want £30k from him... while he'd have some notice/time to pay and a little sight of the estimates etc, they really would have the upper hand.

PasturesNew

Link1: http://www.efbf.org/jobs/Press-When-a-cheap-home-leaves-you-flat-broke-11814.htm

Link2: http://www.insidehousing.co.uk/story.aspx?storycode=6505674

Link3: http://www.london-se1.co.uk/forum/read/8/42757/page=2

Link4: http://newworldfinance.com/files/Buy_An_ex.htm

Link5: http://property.timesonline.co.uk/tol/life_and_style/property/buying_and_selling/article4260924.ece?print=yes&randnum=1151003209000

Link6: http://news.bbc.co.uk/nolpda/ukfs_news/hi/newsid_7441000/7441557.stm

Link7: http://www.southwarknews.co.uk/00,news,9615,6196,00.htm

Link8: http://www.insidehousing.co.uk/story.aspx?storycode=6504635

That should be enough

Spark

After reading all the articles, it reminded me of something : the council has employed an agency of surveyors to make surveys on the state of the flats in my block. They are going in randomly chosen flats in the block to have an idea of what needs to be done (that's a guess, they never gave any details in the letter they sent to us, but the survey supposed to last 30 minutes).
So that would be why I see most of the ex council flats in my area are on sale all over the place, they are selling up in the knowledge that there will be big bills to pay in the future.
The flat my friend was keen on is this one :
http://www.rightmove.co.uk/property-for-sale/property-25910594.html?locationIdentifier=REGION%5E6849&maxPrice=125000&pageNumber=1&fromSummary=true&backToListURL=%2Fproperty-for-sale%2Ffind.html%3FsearchType%3DSALE%26locationIdentifier%3DREGION%255E6849%26radius%3D0.0%26displayPropertyType%3D%26minBedrooms%3D%26maxBedrooms%3D%26minPrice%3D%26maxPrice%3D125000%26maxDaysSinceAdded%3D%26retirement%3D%26partBuyPartRent%3D%26_includeSSTC%3Don%26sortByPriceDescending%3D%26primaryDisplayPropertyType%3D%26secondaryDisplayPropertyType%3D%26oldDisplayPropertyType%3D%26oldPrimaryDisplayPropertyType%3D%26oldSecondaryDisplayPropertyType%3D%26newHome%3D%26auction%3Dfalse%26x%3D52%26y%3D16

KellsBells

It's not unusual - more and more lenders are refusing to lend on flats in blocks that have more than 4 storeys...I'm coming across it everyday.
Even more ironic is that fact that I'm trying to sell repossessed ones, and the original lender (who lent on them in the first place to repossess it) now refuses to lend on them. Who do they think is going to buy them then??

Spark

Maybe the local authorities could buy them back cheap and use them for social housing.
It's a bit hypocritical of those lenders to refuse to lend on those flats when they didn't mind doing so when everything was going their way.
If the local authorities weren't charging such inflated bills for their repairs and improvements, it wouldn't be so bad.

foxy-roxy

PasturesNew wrote: »

Usually it's cash buyers/BTL investors that will have bought the flats in the past. Cheap to buy, good rental income.

The thing is, as a council block, what if he gets to the day before he is due to retire and they decide to double glaze the whole block, fit a new facade, refurbish any balconies/walkways and tarmac the parking area... he could find he's about to retire and they want £30k from him... while he'd have some notice/time to pay and a little sight of the estimates etc, they really would have the upper hand.

:eek::eek: I didn't know that could happen!!!

I would never buy a flat now, i would be terrified that would happen to me!!

paraman

I bought an ex-council flat on the 7th floor of a 8 floor block of flats in London about 10 years ago.

I had problems getting a mortgage on the flat because it was ex-council but I managed to get one with Barclays.

6 months after I bought it , the council decided to install new windows and my share was £5,000, and 3 months after this they decided to put new lifts in the block and do other work and they wanted to charge me £25,000 for this. Luckily I managed to sell the flat before any work had started as I could not afford the 30k.

Councils will upgrade these blocks and any private owner in that block will be liable for a percentage of the total cost of any work done.

My advice is dont buy an ex-council flat.