Nationwide Mortgage Rejected after Valuation

movinghelp

So I'm having a complete nightmare. AIP in principle on 9th July from Nationwise all very confident but valuation delays meant it didn't happen until 30th. I've been chasing nonstop and just found out the surveyor have recommended they don't lend as apparently the flat is classed as high-rise local authority block (maisonette on 5/6th floor) with less than 50% private ownership. Never mentioned to us during the 2 hour application and they've had all property details. Spoken to HSBC and they say the same thing. Natwest seem more confident. Has anyone ever been in this position before??

kingstreet

It happens regularly.

It's essential the professional you are using to arrange your mortgage ensures the lender will accept the property you choose.

An agreement in principle is about the person and has nothing to do with the property. The full application is the first time the lender knows anything about the property, so it's essential full details are given in the submission. Many lenders have issues with ex-local authority, highrise, concrete, low ownership and other block issues.

The job is about matching the right mortgage lender to the property. If you knew you were likely to buy such a property, an agreement in principle with a lender unlikely to accept such a property was a mistake, IMHO.

Angie_B

From research I did when I bought my flat, most mortgage lenders object to ex-LA flats in blocks of more than 4 storeys (i.e. Ground-L3). I bought in a 4-storey block and had no trouble with Nationwide at all.

Consider the future saleability of the flat as well, as you will not be the only person with this mortgage-issue.

movinghelp

We did a full application and were accepted subject to valuation. Apparently Nationwide should have told us about this policy at that point over a month ago so really not sure how this is my fault? Also having spoken to HSBC several people had never heard of this issue either. Can anyone recommend a lender who will accept?

motherofstudents

Why don't you try a broker ?

movinghelp

Have contacted London & Country but the other 2 recommendations are fee paying so around another £500. Now that we've lost the free valuation/free legal fees/cheaper homebuyers report just worried about all the costs adding up.

movinghelp

So L&C have also struggled to place it. Have recommended Woolwich but with a £360 valuation that may come back as rejected we've gone with Santander instead. AIP done but need to get it booked, if it comes back they won't lend may have to find a new property.

thedalmeny

May be a silly question...

But why on earth are you continuing to pursue this, all the difficulties you're facing will undoubtedly be faced by any potential buyer you have in the future when you come to sell... Meaning it would be incredible hard for you to sell the flat at a later date.

Richard_Webster

May be a silly question...

But why on earth are you continuing to pursue this, all the difficulties you're facing will undoubtedly be faced by any potential buyer you have in the future when you come to sell... Meaning it would be incredible hard for you to sell the flat at a later date.

Perhaps that's all OP can afford?

Lenders really do need to train their branch mortgage people to ask questions like: "What floor is the flat on?" "Is it ex local authority?"

movinghelp

I know others may face difficulties but we've been assured several times it's fine for BTL and to be honest there's very little else in this area in this price range. I'm in North London and will have to get a leasehold most likely and my OH hates noise so wants to be on the top floor..

kingstreet

movinghelp wrote: »

We did a full application and were accepted subject to valuation. Apparently Nationwide should have told us about this policy at that point over a month ago so really not sure how this is my fault? Also having spoken to HSBC several people had never heard of this issue either. Can anyone recommend a lender who will accept?

I wasn't suggesting it was your fault. My criticism was levelled at the professional who was advising you.

A Nationwide application form asks for the following information;-

type of property
floor number of flat
number of floors in block
is there a lift.

Answers to which should have been prompting the adviser to stop and research the property. Before I get anywhere near a mortgage application, I've checked it's sale listing, confirmed the remaining lease, ground rent and service charges and ensured the construction method is acceptable to my pool of likely lenders.

On to your latest post.

Are you buying this property as your residence, or as a buy to let?