Only one Lender available!!

shimmiman

Hi All,

I have recently put in an offer for a 2 bedroom 2nd floor flat in a low-rise (4 floors) purpose-built block in the Battersea area.

I was in the process of speaking to lenders about securing a mortgage when the Estate Agent rings up to alert me to the fact that there is a preferred/guaranteed lender on the block (Halifax) and that they are the only lender willing to lend against this set of flats. Naturally worried about this, I asked them the reason as to why.

Noone is able to give me an adequate reason as to why only Halifax will lend-with the two main explanations being possibly that the type of concrete used and that Halifax have a high interest in these set of flats i.e they have lent a lot against it and are prepared to continue to do so.

What I would like to know is that:

1. Is this scenario likely/common? Especially as on the face of it, this flat meets all mortgage criteria for lenders.
2. Can I find out if Halifax are the "only" lender on this particular block. There have got to be over 50 properties, they can't all be HBOS group.
3. What would be the motivation for an estate agent to risk a sale by pushing through a preferred lender!?

Many thanks in advance!

andy.m_2

There was a similar thing in the concrete jungle at Rowner in Gosport.
Low and behold it was Halifax there too.

Nobody else would touch the properties with a dirty stick but Halifax would lend no problem.

shimmiman

Thanks for such a quick reply Andy.

I don't suppose you have any more info on that do you? Its strange as these block of flats, although hardly a visual wow are within a gated development, have a 24hr porter etc and seem to be inhabited by youngish professionals: 25-35.

Thanks,

Shimmi

Richard_Webster

There was a similar thing in the concrete jungle at Rowner in Gosport.
Low and behold it was Halifax there too.

Nobody else would touch the properties with a dirty stick but Halifax would lend no problem.

Yes.......well...Rowner....!!!

Historically Halifax have had a reputation for lending on properties that other lenders wouldn't touch because of the nature of construction. Barclays have had a similar reputation. So there's a hideous ex-Council 1960s block near Southampton Station (now listed would you believe!) on which these two have seemed to be only lenders available.

From a lender's point of view it makes sense to spread the load and not lend on every flat in a block. So I have had a lender not being prepared to lend to the same person on two flats he was buying to let in the same block - Lloyds C&G didn't want to be over exposed.

Although unusual I would suggest the estate agent was only being honest - but you might still find either that Halifax won't lend to to you or they will lend but won't lend when you want to sell. So you would want to look at that very carefully.

kingstreet

Agree with Richard.

Strange contradiction. Halifax only lender will lend, but often lenders won't exceed a certain exposure to lending on a whole block or development, normally 25 - 30%.

A couple of years ago, Halifax did agree to go upto 50% on a block in Smethwick and that's the highest I've ever seen.

Happy_Hermit

We have bought and sold several of the Rowner houses and experience has shown that not only are Halifax the only lenders but they will also only lend if they already have an interest in the property - otherwise these properties sell as cash only.

We found that it was very hard to sell one of the properties in the early / mid 90's as there was a downturn in prices and the Halifax were being very picky about who they lent to for a while - this limited even further the buyers available to us and we took quite a hit on that house. One estate agent even declined to market it, which we were pretty shocked by at the time!

However, knowing the above we have bought into these houses again in the past - the amount of house you get for the money is very good (garden is somewhat sad, though!). I would not buy at the moment as there seems to be a lot of uncertainty in the current market and when the market fell last time it fell very hard on these properties - we lost £10k on the one that we sold in the early / mid 90's which may not seem a lot now compared to current house prices but the house had originally cost £30k!

We were able to chance buying and selling these houses as we weren't putting our whole financial pot in and we were very confident that we would not get into a position where we would have to sell for any reason.

I know that this is about a differnt type of build, but it is a similar situation! I wouldn't want to put all my money into a property that only a limited amount of buyers will be able to buy from me, and I suggest you do give this some serious thought.

shimmiman

Hello All,

thank you all so much for your help and assistance. It is a shame as this London property, although hardly swanky, did seem like it was fairly popular, with good links etc.

I guess that with the headache of sell-on, especially as this was meant to be a stepping stone property, this is probably not the one for me.

Wish they had alerted me earlier, although, conversely Im glad they did tell me at all (even in such a cryptic manner!)