Buying ex-local authority - harder to get a mortgage/need a mortgage broker?

tsg20 · 29 October 2012 at 8:51AM

We're planning on buying an ex-local authority property (we know the
arguments against doing so, but in our neighbourhood one bedroom ex-LA
properties start at £300k, and private flats are more like £450k and
up, so it makes a big difference).

We got a mortgage agreement in principle with our bank (First Direct),
but for ex-LA buildings they require 75%+ private ownership, which
isn't very plausible (at least around here). So, we're going to have
to go elsewhere for a mortgage. We have two questions about this:

- are FD unusually cautious about ex-LA properties, or will we find
similar difficulties at most banks?

- is this the kind of thing where we will be better off going to a
mortgage broker, as they'll have a better idea of which banks will
lend on a property like this?

Dave_Ham · 29 October 2012 at 9:46AM

First Direct are one of the more selective lenders. There are lenders that will lend in Ex LA, although typically they are still subject to valuation.

It is likely to be easier with a local broker, as some ex local Estates are notorious for being unable to achieve a mortgage on.

This situation is often made harder in certain parts of big cities, especially some London Ex LA.

You will also have to budget not to achieve First Direct comparable rates.

Best of luck

Tight_girl · 29 May 2013 at 2:21PM

Hi, my daughter has found the perfect first home, ex-local authority flat, split-level 3rd and 4th floor, deck access. Tried to get a mortgage from Nationwide who said none of the features would be an issue but that it would be subject to a valuation. I contacted their valuers - Countrywide and no issues were flagged up prior to paying the mortgage application fee. Valuation result sounds something like this "The flat is not a suitable property to lend on because most mainstream lenders will not lend on this estate". :mad: Is there some blacklist of ex-LA estates on London? :(This is a catch-22 nobody will offer a mortgage so then the other lenders will say they can't lend as other lenders are refusing to lend. Is there any chance of a mortgage at sensible rates anywhere with this sort of valuation comment? She's not worried about the difficulty selling if she wants to move in future, as she could easily rent it out instead at that stage

Dave_Ham · 29 May 2013 at 2:38PM

Tight_girl wrote: »

Hi, my daughter has found the perfect first home, ex-local authority flat, split-level 3rd and 4th floor, deck access. Tried to get a mortgage from Nationwide who said none of the features would be an issue but that it would be subject to a valuation. I contacted their valuers - Countrywide and no issues were flagged up prior to paying the mortgage application fee. Valuation result sounds something like this "The flat is not a suitable property to lend on because most mainstream lenders will not lend on this estate". :mad: Is there some blacklist of ex-LA estates on London? :(This is a catch-22 nobody will offer a mortgage so then the other lenders will say they can't lend as other lenders are refusing to lend. Is there any chance of a mortgage at sensible rates anywhere with this sort of valuation comment? She's not worried about the difficulty selling if she wants to move in future, as she could easily rent it out instead at that stage

Possibly, the Estate in question needs to be discussed with a decent and probably local mortgage broker.

Some lenders are more flexible than Nationwide, although some estates are very tricky indeed

Tight_girl · 7 June 2013 at 3:43PM

Hi

We've been to a local broker who has tried his best and there isn't anybody prepared to lend on it, he's suggested that the lenders have tightened their criteria since the last property crash so sadly we've given up. If there have been plenty of resales on an estate it seems that valuers have enough properties to compare sold prices with but when there are only a few resales it sends alarm bells ringing and they're not prepared to say that the properties are readily marketable. Once most mainstream lenders won't touch the property then it seems nobody else will either so it'll be cash buyers only. Shame for buyers needing mortgages and shame for the current owners who'll probably have to drop their price even further to sell an unmortgageable property.