My house has become un-mortgageable

hexiburner
hexiburner Posts: 11 Forumite
edited 5 November 2011 at 1:08PM in Mortgages & endowments
Hello everyone,

I purchased a property in April 2005 a typical old style house 2 up 2 down. At the time I managed to secure a mortgage from a well known high street lender. I also obtained a home buyers valuation report. Nothing indicated a problem with the saleability of the property in the future.

Moving on to November 2011. I have had my property on the market for the last 8 months. In that time I have received a number of offers which I have accepted. On each occasion the potential buyers have been refused a mortgage because of the construction type. One of the walls of the house is a single skin construction. After much discussion with the Estate agent, Financial advisor’s and surveyors my house has now been labelled as un-mortgageable. No lender will give a mortgage on the property which just leaves cash buyers.

If I was able to get a mortgage in April 2005 why now can I not get a mortgage on the property? I have phoned the bank and explained the situation and I am awaiting a reply. I have received cash offers which as you can imagine are low and do not cover the full value of the loan. Your advice and wisdom would be much appreciated.

Regards

O
«134

Comments

  • dkmax_2
    dkmax_2 Posts: 228 Forumite
    Part of the Furniture Combo Breaker
    Could you describe the building and offending wall in more detail ? When was the house built ? Which wall is it, what is it made of, how thick is it and is it load bearing etc.

    It is quite possible that the initial survey missed it or the criteria have changed in the interim.
  • Wh05apk
    Wh05apk Posts: 2,938 Forumite
    Part of the Furniture 1,000 Posts Combo Breaker
    Lenders have become fussier about lending, so it could be due to a change in criteria?

    Was the single skin wall picked up in the original home buyers report? if not you may have grounds for a complaint.

    Also have you considered having the wall skinned? it may be tht £5-10k worth of work, could then open you up to buyers needing mortgages, which could increase the value by far more? as it stands if only cash buyers will buy, the value will be pitifully low.
    I am a mortgage adviser.
    You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.
  • The house was built around 1820. It was originally three cottages made into two. The neighbours are an elderly couple and will also have the same problem. It is highly probably that all the walls are affected. A rebuild of the wall also means that the neighbours house will be affected. So any rebuilding is out of the question.

    Yes, the lending criteria has changed. When I purchased the property in April 2005 there was no issue lending money on this property type. There were also no remarks as to the saleability of the property due to the construction.

    As it stands I don't know if I have any grounds for compensation. I am at the moment discussing the case with my lender.

    I no longer live in the property as I got married and moved into my wife's house. If I had sold the house and people were able to get a mortgage on it I would have walked away with 30K. At the moment the cash offers I have received don't even cover the loan!

    I am stuck with a property that no one can get a mortgage on!

    Regards
  • paulmapp8306
    paulmapp8306 Posts: 1,352 Forumite
    This is not actually uncomon - and unfortunately your stuck. the only options are to get work done on the house to make it "mortgageable" or to accept affers from cash buyers - who will pay less (as you have found out) due to the difficulty re-selling. Id bet a lot of money those cash buyers are looking for a property to rent out long term. Its exactly the property type id look for to do that.
  • kingstreet
    kingstreet Posts: 39,203 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    hexiburner wrote: »
    I also obtained a home buyers valuation report. Nothing indicated a problem with the saleability of the property in the future
    I suggest you ask some rather pointed questions of the surveyor, in writing. The survey should have mentioned the type of construction and the likelihood of future re-sale problems.
    As it stands I don't know if I have any grounds for compensation. I am at the moment discussing the case with my lender

    There is nothing to suggest the mortgage lender is in the wrong, nor are they in a position to help you.
    I am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Please do not send PMs asking for one-to-one-advice, or representation.
  • The survey's overall opinion concludes:-

    "This Property is, on the whole, considered to be a reasonable proposition for purchase at the agreed price. No evidence was found of any significant defects or shortcomings, and no particular difficulties are foreseen on resale in normal market conditions"

    My appraisal on this is that a single skin wall is a significant defect as potential buyers are unable to obtain finance on the property.

    Any comments welcome?

    Regards
  • kingstreet
    kingstreet Posts: 39,203 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    hexiburner wrote: »
    My appraisal on this is that a single skin wall is a significant defect as potential buyers are unable to obtain finance on the property.

    Any comments welcome?
    Yes. I agree with you. The issue, if mentioned, was likely to give rise to a number of questions. One of which would surely have been "should I buy this property?"

    Had you asked yourself this, armed with the knowledge you now have, the answer may well have been "no".

    Pursue the surveyor via written complaint. Did the surveyor also do the lender's valuation for mortgage purposes? Was anything on that report suggestive of the future resale problem?
    I am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Please do not send PMs asking for one-to-one-advice, or representation.
  • Yes the same surveyor also carried out a valuation report for the lender at the same time. I also have a copy.

    At the time of purchase high street lenders were happy to lend on this construction type. At the present moment surveyors will highlight this issue and the lender will automatically decline the mortgage.

    The way I see it is I pay professional people to investigate potential problems and highlight them as an action. A solid wall construction was not even seen as a potential problem at the time of purchase. Nor did the surveyor even suggest it would be in the future.

    I have spoken to the surveyor who refuse to speak to me. That have said I must go through my lender to pursue any complaint, which I am now pursuing.
  • DVardysShadow
    DVardysShadow Posts: 18,949 Forumite
    hexiburner wrote: »
    I have spoken to the surveyor who refuse to speak to me. That have said I must go through my lender to pursue any complaint, which I am now pursuing.
    No, you paid them for a report to you. They cannot fob you off onto your lender.

    Having said that, when solicitors refuse to speak to former clients in similar circumstances, it is indicative that they are making a claim on their professional indemnity insurance. Make of that what you will.
    Hi, we’ve had to remove your signature. If you’re not sure why please read the forum rules or email the forum team if you’re still unsure - MSE ForumTeam
  • Koicarp
    Koicarp Posts: 323 Forumite
    You still haven't answered the questions in the first response. I'd be interested in your answer to the question on wall thickness.
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