Retention predicament-help please?

fivestar

Very long story short; been trying to purchase a 3 bed flat (one of two, victorian) since last summer, probate now granted, valuation done, valuer undervalues by 75K!!:mad:'elements of the property appear to be in a poor condition' and require' a varied range of works that could be done'? An elderly lady had the flat and her belongings are still there, the valuer photos show a cluttered kitchen & bathroom nothing structural at all. The surveyor says no retention required and property is suitable for security. Now lender wants 100% retention!! until fit for letting.
We are also concerned that the surveyor that 'signed' the report did not visit the property (man) as EA said a lady done the survey?
What can we do please (first time here be patient please)

holly_hobby

Ultimately, I am afraid its the lenders perogative if they refuse to lend - in this case, they wish to ensure that the property is suitable security for their lending - which it appears they have decided it isn't.

You say the valuer (whom acts for and guides the lender) has cited NO retention reqd (despite reqd works).

What are the noted works/issues ?

What reason has the lender/UW given for the full rentention, and what do they want done to enable it to be lifted/released ?

Have you a broker or mortgage adviser ? If so, what are they doing to mediate on this ?

Bit more meat on the bones will help give a more detailed response.

Hope this helps

Holly

fivestar

Yes our financial guy is mediating but we cannot get a clarification of the works required other than repair and maintenance?? so why 100% thats what is baffling ?

kingstreet

BTL lending is predicated on the property being immediately ready for letting. It's not the same as a residential purchase, as you would not be reliant on the rental income.

The lender will not lend at all because you may be using its BTL product as a means of property development and "flipping" and it will wish to avoid that. Best you will get is a "light refurbishment" product from some lenders.

holly_hobby

Structual repairs inc roof, re-wire (if old it may still have the old 2 core installed which is a fire hazzard), evidence of damp, the list could go on ....

But you say, the survey didn't ask for any specialist reports, any retention nor did it detail remedial works ?

Is that correct ?

H x

Ps - sorry just read kings, and I missed that is to be let - which as Kings. states does rather change the ballgame, if no immediate let due to refurbt reqs. Resulting in no immediate let and rental income, so rather throws out their affordabiliy assement, which will be their issue.

fivestar

we have a similar age property in a fair condition too and we have no problem letting it? yes its BTL but the valuer has not asked for a retention and just generally repair and maintain, both kitchen and bathroom are dated but both very useable, i feel the valuer has not looked past all the clutter which will obviously be removed?

kingstreet

Same lender and surveyor for both properties?

Time elapsed between the two purchases?

Broker or direct?

ValHaller

fivestar wrote: »

An elderly lady had the flat and her belongings are still there, the valuer photos show a cluttered kitchen & bathroom nothing structural at all. The surveyor says no retention required and property is suitable for security. Now lender wants 100% retention!! until fit for letting.

What can we do please (first time here be patient please)

You need to liaise with the vendor and the surveyor. Explain the situation to the Agent, who will understand the issue. Between yourselves and the vendor you need to get the place up to a state where the property is agreed by the surveyor to be lettable. Or you need to change lender.

I am somewhat surprised by a 100% retention - I would think that a 10% retention - representing the likely cost of making the place lettable would be more apprpriate. Although overall, it looks like a polite way of declining the loan based on the property rather than on your quality as a borrower.

fivestar

Different valuer and lender last summer, (July) still on our behalf, then the lady passed away and we had to wait for probate to be granted, hence new lender and another valuation. Via a broker.
We agree a 10% retention is correct for the small amount of remedial works required?

kingstreet

Ask the broker if the lender's criteria says the property "must be in readily lettable condition," as it's possible the lender will not hold a retention based on the cost of the repairs - it may be an all or nothing situation.

If a property is readily lettable, they lend. If it isn't they won't. Even if the repairs are minor.

fivestar

Will do thanks