Surveyor declined mortgage - can I appeal?

matty_hunt

Hi.
Yesterday I paid a £250 fee to arrange a buy-to-let mortgage with Covenrty Building Society. Today I hear from my mortgage advisor that a surveyor had been 'round today to value the property on behalf of the building society. The building was all ok, but then he instructed the lender to refuse the mortgage because its next to a pub!

Quote from Coventry BS, "We have received the valuation for the above. The valuer has advised that the property is behind a public house. As this may cause a nuisance by way of noise and unsocial hours, this property is considered unacceptable for our mortgage lending. The case is therefore declined."

The pub in question is next door, but next to the house is a single lane service road that feeds the garages at the back of the properties, then a high fence and then the pub garden, followed by the pub building.

Is this seriously a legitamite reason to decline a mortgage?
Is there any process of appeal?
Are all lenders going to decline due to the pub? I assume the valuer/surveyor is local so is there a chance that another lender would end up using the same guy and thus resulting in the same outcome?

Any advice much appreciated. I dont know how to go forward with this, nor does the mortgage advisor. He has never heard of such a desicion.

Many thanks

GMS

Lenders have the right to decide who they will lend to and on which properties they will secure.

Next to a commercial is often seen as a higher risk with pubs, take aways and late night convenience stores in particular not liked by lenders.

Did you tell teh lender the property was next to a pub? If so you may have a case for a refund of valuation fee if they had no intention of lending on it.

Why would you want to appeal this? If the property is difficult to mortgage you could be stuck with it on any mortgage you manage to obtain. Plus you may have issues attracting good tenants.

Senior_Paper_Monitor

Not unknown - perfectly within their rights (if a bit over the top [I would have thought downvaluing to be more justifiable] - but we find many survey decisions from Coventry to be so and we suspect that their corporate policy instructions to surveyors are particularly harsh).

Down valuations (and obtaining guidance on likely values - believe me two surveyors / two lenders will give widely varying opinions) are the bain of our lives at the moment.

My advice - chalk it up to experience, take the financial hit and sart agin (either new property and/or new lender).

I suspect the same surveyor working for a different lender may report differently (but can't prove that).

I suspect another lender may give them different policy instructions and treat the report differently (but can't prove that either).

I am pretty confident any appeal will be a waste of time.

matty_hunt

Thanks for your replies. You have made some interesting points. Problem is that we had hoped to move into the property in 25 years time as our retirement home. Not sure my partner is going to let me walk away from this one easily! At least the appeal option is off the table now. Cheers

GMS

Appealing a valuation figure is one thing but appealing an out of criteria decline is another altogether.

If they were told it was next to a commercial property then I would be pushing for a refund of some sort.

matty_hunt

As I had no reason to suspect the pub would cause an issue I never thought to mention it. Ive learnt something new today!

opinions4u

Surveyor declined mortgage

For clarity, the lender declined you a mortgage.

The surveyor merely passes on observations relevant to their lending policy.

Dave_the_Ginger_Cat

Many lenders take a view on marketability and likelihood of resale, which is what the surveyor is talking about here.

If they think there is a risk that either you (or in worst case they) needed to sell it and it would be less attractive to prosepective purchasers, then they are well within their rights to decline.

Leon_W

To be honest, I always ask clients if the property is near commercial as it can cause problems.

Northern Rocks lending criteria has always been not to lend on flats over shops or even adjacent to commercial premises, others are similar, I recollect Coventry being one of them.

However, I never found Halifax/Birmingham Midshires to have that problem with Buy To Let properties although they can change their lending policy at the drop of a hat.

It is always worth having an eye on resale, as over the last few years lenders have tightened criteria and what you previously bought and was mortgageable is now not mortgageable at all and 'cash buyer only !'