Unmortgageable flat over shop

yorkie1947

Has anyone been successful in getting a mortgage for a flat above a shop ?
My daughter & son-in law have been turned down numerous times due to the lenders surveyors placing a £0 valuation for mortgage purposes on the flat they want to buy.

kingstreet

... and the lenders concerned were?

_Andy_

I think these declines should be sounding warning bells to you.
Don't you worry about re-sale if even today lenders don't want to touch it?

Dave_the_Ginger_Cat

I would suggest they find another flat

ACG

You need to stop making applications on a whim.

Speak to a broker. There are lenders but they may not be on the high street.

If the property is above or very close to a pub/off license/take away/launderette (due to fire risk) etc then its going to be very difficult.

If the shops are things like a butchers/greengrocers/flower shop ettc then it will be a lot easier. But making random applications is going to affect the credit score and make a tough ask even harder.

But you do need to look at the resale value as has been mentioned.

dunstonh

non-standard buildings will see some lenders reject. A little bit of research or use of a broker would have avoided these declines.

However, the fact many lenders dont like flats above shops should put them on guard. In periods of market decline, properties that are harder to sell (such as those above shops - especially bookmarkers, off licence etc) will drop in value more.

Now, if they are happy with the inconvenience and are getting a decent price (i.e. quite well knocked down from the estate agent price and below comparable sized properties that are not above a shop) then they risks may be worth it. However, they need to see a broker or do better research rather than put in random mortgage applications.

Prothet_of_Doom

And yet Shelter, the charity for homeless and housing problems, says that there are the EQUIVELENT of 250,000 homes above shops if they were converted, (added to the 500,000 homes that are empty, and have no council tax collected on them)

Individually we factor in risk when we make a major financial commitment, and the lenders obviously have history of previous problems.

As a society, we need to push the redevelopment of this wasted space.

yorkie1947

_Andy_ wrote: »

I think these declines should be sounding warning bells to you.
Don't you worry about re-sale if even today lenders don't want to touch it?

Andy, they are happy with the asking price and have factored in re-sale difficulties.

yorkie1947

Dave_the_Ginger_Cat wrote: »

I would suggest they find another flat

They want this flat because they are renting, and hoping to eventually buy, the shop below.

yorkie1947

kingstreet wrote: »

... and the lenders concerned were?

I'm aware that Natwest & Woolwich have declined.

yorkie1947

ACG wrote: »

You need to stop making applications on a whim.

Speak to a broker. There are lenders but they may not be on the high street.

If the property is above or very close to a pub/off license/take away/launderette (due to fire risk) etc then its going to be very difficult.

If the shops are things like a butchers/greengrocers/flower shop ettc then it will be a lot easier. But making random applications is going to affect the credit score and make a tough ask even harder.

But you do need to look at the resale value as has been mentioned.

Who says the applications have been made on a whim? they have been through a broker.