"high rise" & "newbuild" mortgage problems

meemawuk

I've been trying to get a mortgage on a property that is on the 7th floor of an 11 storey building built in 2007 and keep running into this problem. The providers don't offer a mortgage on properties over a certain height, or the property is too new. I wouldnt mind but they force me to answer a load of questions before getting to the point, even though I explicitly ask them at the beginning of the call.

I have spoken with a mortgage adviser who has found me a couple of deals, but they don't actually look that great based on what I have seen available out there? Is it likley that I'm expecting too much based on the property I am buying, and that lenders just don't like to take on such properties?

Dave_Ham

These are always in the conditions of almost every lender. Unfortunately they do hate the high rise lending and the more floors the harder it gets.

There are some solutions out there, but unfortuantely these will not be on the best buy tables.

Either trust your broker they have found the best deals and take one, or research yourself as most lenders will have this in their criteria and you should not need to answer any questions.

Alternatively, pick up the phone to another broker assuming no fees and see if they can beat it.

Finally, you also run the risk on these sorts of properties that a lender may accept you on the face of it, only for the surveyor to go out and say it does not represent suitable security for the bank. If they have commercial premises underneath or attached it becomes even harder..

Do you have to but this place?

meemawuk

I don't necessarily have to buy the place but I want to. The property also has commercial property attached to the building, but with separate access for residential properties. There have been no issues regarding this with anyone I've spoken to.

It's likley the adviser has found me the best offer. Just frustrating that because of the property I want, I cant get a more competitive rate.

kingstreet

Lenders have always been "picky" on flats in tower blocks.

Some won't like the construction method, others won't lend above the fifth floor, yet more will insist they are all in private ownership. Then you'll get one, but they want a lease lasting 50 years beyond the mortgage term or won't go above 50% LTV or somesuch.

If you have an adviser who has found you a couple of deals, they may well be the best you can get.

Northern Rock tends to be a bit more flexible on tower blocks but looking at its criteria probably still isn't suitable for you;-

Flats should be leasehold with the unexpired term of the lease at the end of the mortgage term being a minimum of thirty years. Northern Rock do not tend to lend on the following:

Studio Flats (sometimes considered dependent on location)
Flats with external ''deck'' or balcony access
Flats above lock-up garages, except the modern ''coach house'' style dwelling - subject to valuers comment
Flats above/adjacent to retail premises (unless located in more prestigious areas. Will be considered in one of the 7 major centres in Scotland - Edinburgh, Glasgow, Dundee, Aberdeen, Inverness, Stirling and Perth. Consideration will be limited to the city centre areas and more particularly in Glasgow restricted to the following postcodes:
G1-G5, G11-G15, G20-G23, G31-G34, G40-G46,G51-G53, G61, G62, G64, G69, G72, G73, G76, G77, G81.
The following conditions must be satisfied:

Location of flat should be where there is reasonable demand and the block is predominantly owner occupied
Garden or basement flats must benefit from adequate levels of ventilation and natural light and be located in areas of proven demand.
Block does not exceed 4 storeys

and

Where a flat is within Greater London the following conditions must be met:
Purpose built flats in blocks not exceeding 5 storeys
Converted flats in blocks not exceeding 4 storeys
Mansion Flats up to 8-10 storeys being lift served in areas such as Kensington, Chelsea, Westminster and St John's Wood
Flats with external 'deck' or balcony access may be considered in prestigious areas of Central London where it is confirmed demand exists

If your adviser has all the information, I can't see how you're going to get better, unless you pick up the phone and ring all the lenders yourself.

Conrad

I wouldn't buy such a property.

All it needs is for a few more scare stories to emmerge and then all lenders could stop lending on these so you have a worthless asset in terms of re - sale value.

One of the key problems is costly maintenance costs on such buildings, partcularly where there is a lift. This then leads to another problem as some owners refuse to pay these high costs and thus this makes selling other flats impossible because an incomming bujyer wont want to get involved or relish the thought of having to cough up for those that wont pay thier share. You end up with legal wrnaggles spanning years.

Walk away is my advice.