Mortgage for Property Above A3 Unit

amy999_2

:A: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 :):):):):)

neverdespairgirl

Where in London is it?

In central London, where I live, it's easy and common to get a mortgage on a flat over a restaurant / cafe / etc.

WellKnownSid

The story so far, including the valuation should be telling you to run away as fast as you can and not look back!

Forget selling, what if you want to remortgage in a few years - you'll hit the same problems, possibly even worse based on an updated valuation?

If you're set on this, then use the low valuation as your bargaining chip, because frankly that's all the lender believes it's worth.

opinions4u

Think about the future.

Dream properties are everywhere. Your dreams will be fulfilled, but this one will turn in to a nightmare.

If there are only two lenders in the market at present, I would expect rates to be higher. I would also expect remortgage options to be limited in the same way - so you're stuck with these two. If they get in to financial difficulties they will jack their rates up further and you have no way out.

You've already highlighted selling as a problem. Too right.

Don't hamstring your life by buying this property.

koexelek

neverdespairgirl wrote: »

Where in London is it?

In central London, where I live, it's easy and common to get a mortgage on a flat over a restaurant / cafe / etc.

It might have been in the past, but it isn't now.

Lenders look for excuses not to lend all the time these days.
I had an client's application for a flat in London declined recently, because it was just NEAR a fish and chip shop.... not adjacent or above it :eek:

If the OP wants to buy the place, I suggest they look at is as a long term investment. In the future, lenders will hopefully be more relaxed with their lending policies again.
In the current climate, try to sell it again in a couple of years time, and you are really looking cash buyers only.

neverdespairgirl

koexelek wrote: »

It might have been in the past, but it isn't now.

Lenders look for excuses not to lend all the time these days.
I had an client's application for a flat in London declined recently, because it was just NEAR a fish and chip shop.... not adjacent or above it :eek:

In central London?

I ask because I know 3 couples who've bought flats in central London in the last 6 months, all with mortgages, all above cafes or restaurants. It's really common in Bloomsbury.

hillcats

As hard as it may be now, you will find better - walk away !