Mortgage with an overage

redstiletto

I hope there is a mortgage expert out there who can help. I'm buying a house with some land. The vendor wants an overage on the land in case it's ever developed in future. As it's currently greenbelt and I have no intention of building on it, I'm not concerned. However, my mortgage broker has informed me I'll be unable to get a mortgage with this condition in place, as it will make the property more difficult to sell (i.e. a higher risk).

Now, whilst I can think of a few other options (parcelling the sale up into different parts) I just wondered if anyone has managed to get a mortgage with an overage, or knows of a way to do it, as that would be the most straightforward way to proceed if possible.

Many thanks in advance!

Thrugelmir

Overage's aren't uncommon. What's the proposal on the table?

getmore4less

get proper legal advice on any ovreage.

They can be onerous(no good) or worthless(what you want).

Try to get it without any thing that overhangs it can just become a pain in the neck and could make sellling an issue

What use is the land to you as it is?

Can you just have seperate lease off the current owner or agree a price without overage.

redstiletto

Thanks for the replies, the property has grazing land, which I want for horses. However, despite being greenbelt, the current owners obviously think it's got future development potential and want an overage for 25% of any future uplift. The overage doesn't worry me (as I have no plans to develop the land) but the mortgage broker says it will be considered a 'restrictive covenant' i.e. making the house more difficult for the lender to sell if they need to, and they won't touch it. I will try the EA on Monday to see if they are willing to move as I don't really want to cash-buy or lease the land as it will devalue the property when I sell and make it more difficult to sell.

chezandpaul

Hi there, we too are trying to buy a property with an overage provision by the Church of Wales. We've just had our mortgage offer withdrawn 2 days before exchange! I have spoken with a dozen banks and they have all said that they will not borrow against any property with an overage. I then phoned an online mortgage broker and he said that no high street bank will offer with an overage these days as they only want to do "clean business". He did however say that he could email some of his more niche lenders to see if any would be prepared to borrow under an overage but that they would probably want at least a 50% LTV together with a HLC. We too have no intention of building on the land, as ours surrounds the property and isn't in a separate paddock. I'm just wondering if and how you have resolved yours please? Thank you, Cheryl.

scimmy_ben

This must be the year for it...

We have also had a mortgage offer withdrawn within days of exchange - a one line fax from the bank. Did anyone get a mortgage with the overage provision still on?

Ben

scimmy_ben

Thought it was worth an update...

After some to-ing a fro-ing and checking most mortgage lenders, it seems that getting a domestic mortgage with an overage is next to impossible so it was dropped.

DVardysShadow

With a low LTV, I would have thought that the way to do this was to partition the land, mortgage on the house and buy the paddock outright with the overage