Possible retention on mortgage - please help!!

nats04

Hi everyone - this house buying lark is making me feel really stupid! Just when I think i understand how it all works something else happens to confuse me!!

I am buying through the Open Market Homebuy scheme (complicated enough as it happens!) and have had my offer accepted, mortgage AIP and a homebuyers survey carried out. The surveyor valued the house at the offer price with an increase of £1k once essential works were carried out. The essential works are:-
New DPC
A fire barrier in the roof space
Repair of the roof and rainwater goods

The cost of the damp works and fire barrier has been estimated at £1650 and I'm still waiting for the roof quote!

The surveyor seems to be recommending a £1k retention on the mortgage subject to this work being carried out - my question is Why?, when he has valued the house at the offer price even without the work???

Can someone a bit wiser than me answer the following?
1. Are the BS likely to retain and insist the work is carried out? Is this likely to be the £1k recommended in the original survey or will it refloect the actual estimates?
2. Are they likely to still retain even if I can negotiate a reduction in price?
3. What sort of timescales will the work have to be completed in?
4. Will they insist I get the work completed in a set timescale even if I decide to forfeit the retained monies?

I would prefer to have the work done in bits and pieces rather than having to pay for it all to be done at the same time! Was hoping for a few months breathing space when I move in!

Any help/advice/experiences would be welcome.
Thanks!
Natalie

l_i_s_a

Hi Natalie,

I have recently been through a similar experience where the surveyor recommended a £2000 retention for possible damp work required (the report stated to get a further inspection due to damp meter readings but there was no actual sign/evidence of dampness on the walls). The bank ignored and did not retain despite this. This may have been because I did have a certain amount of deposit and so did not require a 100% or similar mortgage, so even with the retention the amount borrowed was much lower than the value. My surveyor also valued the property at full purchase price on my homebuyers similar to you, but the report that went to the mortgage company was the one with the recommended retention on.
Maybe your bank will decide what to do based on the amount of deposit you have, the kind of work required (therefore the risk level to them of future problems/deterioration) and/or the comments on the report to them from the surveyor.
I hope this is some kind of help!
Lisa

foolishqueen

Hi Natalie.

I am about the same way through the process as you

I had my Homebuyers survey back stating that some damp proofing work and woodwork would need doping, but he valued the house at the asking price that I am paying. So I was relieved at this.

A couple of days later, I goyt the mortgage valuation back (Northern Rock btw). The valuer had valued the house at the asking price, but had recommended a retention of £3,500. The good news was that the NR said in thier covering letter that they would not be imposing the retention! Phew. :j
But they did say they would make it a condition of the offer that they would strongly recommened that the suggested work was carried out within 3 months of completion. However, they only used the word "recommend"v rather than insisting on it being done.

I hope this might reassure you, but obviously each lender is different.

I hope it goes the way you want it to.

Cheers.
David.

mrsS_2

Hi- same thing happened to me-retention of £1500 for damp

bank didnt retain either as we had a good deposit- just made it a condition that we got it sorted out.

seems everyone with a deposit has the same experience-the bank just flags it as a warning. so as long as you have a deposit you should be ok.

zkeithz

Some lenders will implement the retention merely as leverage to ensure the work is actually carried out. Time scale may vary depending on the severity of the defects and any adverse affects this is likely to have on the property, most routine repairs are typically required within between 3 to 12 months. With such a low retention it is possible that your lender will take the view that it is not worth applying, hence release 100% of the mortgage. Why not simply suggest this to them!
Best of luck with it.
Regards
Keith