Buying a flat above a restaurant

amy999_2

:APlease help????

My boyfriend and I found a beautiful split level flat in London above a restaurant which we fell in love with so we put in an offer and had it accepted!! Woo!

But then we got very excited and when our mortgage broker (London and Country) tried to find us a mortgage ONLY 2 lenders in the country didn't instantly reject us! Everyone else did (even with our big deposit) because the flat is above an A3 Unit or restaurant. So of these 2 lenders we submitted an application to one THEN our valuation came back at ONLY HALF the price of the property's sale price!!! Ahhhhh. We are gutted!!!

So now we're stuck. We don't know whether to attempt a mortgage application with the other one lender in the country who didn't instantly reject us - or whether to give up! Our main fear is that even if lender2 does accept us when it comes to selling on the property in a few years time our buyer won't be able to get a mortgage because then they'll get rejected too. . .

Do you have any experience of purchasing above an A3 Unit or Cafe? Do you have any advise or words of wisdom . . . .think we're about to let our dream home slip through our fingers ....

Thank you kindly :):):)

PasturesNew

It's generally accepted that most lenders won't lend on anything above a shop. Most flats etc over shops are bought by landlords or big investment groups for the long-term.

A nice restaurant today, could be a heaving, smelly kebab shop next month, open until 4am with all the taxis lining up outside and general drunken jollity non-stop.

ruggedtoast

When we were thinking of something similar I happened to come across a post on another forum from someone who bought a flat above an amazing, hip, new age cafe that they loved.

Shortly after it closed down and was replaced by an open fronted fish mongers. They couldn't even leave their clothes in there during the day without stinking, let alone sleep there. Unsellable and un-lettable.

satchmeister

amy999 wrote: »

:APlease help????

My boyfriend and I found a beautiful split level flat in London above a restaurant which we fell in love with so we put in an offer and had it accepted!! Woo!

But then we got very excited and when our mortgage broker (London and Country) tried to find us a mortgage ONLY 2 lenders in the country didn't instantly reject us! Everyone else did (even with our big deposit) because the flat is above an A3 Unit or restaurant. So of these 2 lenders we submitted an application to one THEN our valuation came back at ONLY HALF the price of the property's sale price!!! Ahhhhh. We are gutted!!!

So now we're stuck. We don't know whether to attempt a mortgage application with the other one lender in the country who didn't instantly reject us - or whether to give up! Our main fear is that even if lender2 does accept us when it comes to selling on the property in a few years time our buyer won't be able to get a mortgage because then they'll get rejected too. . .

Do you have any experience of purchasing above an A3 Unit or Cafe? Do you have any advise or words of wisdom . . . .think we're about to let our dream home slip through our fingers ....

Thank you kindly :):):)

" .... tried to find us a mortgage ONLY 2 lenders in the country didn't instantly reject us ... valuation came back at ONLY HALF the price of the property's sale price ..."

Why are you gutted? they have probably saved you from making the biggest mistake of your lives

Doozergirl

I had this conversation with someone recently. Unless it's forever (it just can't be above a restaurant) or you get a really, really good deal, then it just isn't worth it. if you have children, for example, after the first six months you realise that walking to the park doesn't cut it. You need a garden for the purposes of sanity etc.

Mortgage are so hard to come by that the person that owns this flat currently is the proud owner of a big White Elephant. And if you jump through every hoop to buy it yourselves, you have to realise that there are really not many people that would find living above a restaurant acceptable, and secondly, of those that would, most will be frightened off by the fact it's near impossible to finance.

flats above restaurants are the key domain of cash buyer landlords who will rent it to people that don't mind it in the short term.

All advice really should be not to buy something that is essentially unsaleable. I've bought rat infested, rot-ridden holes and turned them around, but I won't be buying a flat above a restaurant. Because some things you can't control. So you don't try.

neverdespairgirl

Doozergirl wrote: »

I had this conversation with someone recently. Unless it's forever (it just can't be above a restaurant) or you get a really, really good deal, then it just isn't worth it. if you have children, for example, after the first six months you realise that walking to the park doesn't cut it. You need a garden for the purposes of sanity etc.

We've lived in a flat in central London with our now 5 year old - and I'm as sane now as I was before....

greenmoneysaver_2

The 2 issues are
1) A3 means anyone can open a food cooking etablishment, pretty much with opening hours they want, deliveries whne they want and really no limit to the smells/nconvenience for the properties surrounding it

2) A3 usage means lots of insurance hurdles as they are deemed a higher fire risk, impacting on those willing to lend and also the available contents and buildings insurance you will be able to access.

If the valuation is that much lower, either buy for that or walkaway. I would avoid like the plague!

PasturesNew

neverdespairgirl wrote: »

We've lived in a flat in central London with our now 5 year old - and I'm as sane now as I was before....

Yours is probably nice and big and light and posh ... and London has lots of parks that you're probably near. For most people, in most towns, a flat over a shop is a grim, dirty, enclosed and depressing space... and it's not worth going out to try to walk somewhere better as there's limited options outside the door.

celyn90

We used to rent flat above a hairdressers - we weren't in most of the time, but at the weekends it was really noisy during the opening hours - and the staff loo was just outside our door.

cel x

lynzpower

there can also be added fire risks from properties above A3 premises that also contribute to the lenders lack of interest in lending on them.

silverchair

I would never buy above a restaurant for the same reason as others have stated. I used to rent a flat above a sweet, little cafe. Nice enough, until the owners decided to hire it out for all night functions. The functions made it into a night club. Music blaring until 4am in the morning 7 days a week. People smoking & shouting outside my bedroom window. Fights in the car park (again below my bedroom window), police cars etc. It was absolute hell.
You have had a very lucky escape!