Mortgages for property that is above commercial premisis

B_Real_2

My solicitor informs me that mortgages can sometimes be refused on property that is above commercial premises. Whilst this may not affect me because I have a fairly sized deposit, it may affect the re-sellability of the property I am looking at (it's located two floors above a business that sells windows).

Does anyone know how many lenders refuse to mortgage residential property that is above commercial premises?

Conrad

Yes, it's a common issue.

In harder times such as now lenders retrench and as such getting a mortgage on this type of property can be impossible. There are many issues that affect the decision such as the nature of the other commercial properties in the parade, whether change of use is possible - for example changing the window shop into a open all hours offy. Then there are access considerations, noise factors etc.

I'd only invest if the yield was very high and resale was'nt on my radar.

Let_Us_See

Does anyone know how many lenders refuse to mortgage residential property that is above commercial premises?

Surely it would be more beneficial to know how many lenders will consider this property?

There are certainly lenders which will consider property above commercial premises - fast food, restaurants, late night stores are extremely difficult. Restrictions to number of storeys and ratio of mixed status (private to social housing) may also apply. Basically, lenders willing to accept such a property often rely on the judgement of the surveyor to assess suitability and collateral for lending purposes. Find an independent whole of market consultant.

B_Real_2

In this instance, the flat is a traditional tenement flat in Edinburgh, the commercial property is on the corner of the main road and the side street, and the entrance to the flat is a door down on the side street, so does not share an access route. At this part of the main road, there is a chinese take away another 10 or so doors down, and thats about it.

The Mortgage Valuation Report in the Home Report states "We consider the subjects offer suitable security for normal mortgage purposes".

Let_Us_See

See - you had the answer all along. Why the post????

B_Real_2

Because I don't know what other factors that the lenders take into account.

So it doesn't matter that its above a commercial property at all then? The lenders will base their decision based purely on what the surveyors say in the Home Report?

Let_Us_See

The Mortgage Valuation Report in the Home Report states "We consider the subjects offer suitable security for normal mortgage purposes".

Is this a report you have commissioned or the lender? If the lender has instructed the valuation and the property has been deemed suitable security for mortgage purposes - what is the issue? Why are you worrying about other factors?

B_Real_2

In Scotland, this is a mandatory report that the sellers of the property have to have done and make available to buyers. I'm not sure if lenders will require an additional report once the sale actually takes place (perhaps someone else in Scotland can advise on this?).

I imagine that the report will have a 'use by' date of some sort.