Barclays/Woolwich Mortgage Refused: Flat is above shop

Plimsoll123

Hello,

I got a shared-ownership mortgage with Woolwich back in 2007, for a 40% share of a flat which happens to be located above some commercial premises (a Superdrug, a Credit Union, and a William Hill). I recently applied to Up-staircase/increase my mortgage with Woolwich (now owned by Barclays) only to be refused any further borrowing because my flat is located above shops. It seems unfair to me that they were perfectly happy to lend six years ago, only now to change their lending policy leaving me in the lurch. Has anyone else been in this situation?

kingstreet

Sadly, lenders can (and do) change their lending policies all the time and post-credit crunch are more careful with "non-standard" situations.

You'll need to find a new lender for the whole mortgage.

Plimsoll123

Thanks, I'm looking for new lenders now. I will not be banking with Barclays again though. I've been a loyal customer for over 6 years and have never been in arrears, so it's really frustrating to be shafted by them like this. I'll probably have to pay more to transfer my mortgage and probably pay a higher rate of interest and I'll have to get my flat revalued again. But I'm not going to give them anymore of my hard-earned cash!

ACG

Your moving your banking because you have paid your mortgage on time and they now longer want to lend above shops?

You HAVE to make your payments on time or you will be sleeping in the doorway of those shops.

I think you will struggle with this to be honest. Partly because its shared ownership and partly because its above a shop. Have woolwich declined it being above a shop or being above a bookies? The other shops would probably pass with most lenders but the bookies will be the biggest issue

Wh05apk

You really need to speak to a good broker on this, ensure they are aware of the shops below, and they can phone the lenders/surveyors to get an initial indication first, often these cases are down to valuers comments, also depends where in the country you are, something like this in London, would unlikely be a problem, whereas a quiet suburb it probably would.

kingstreet

Are you staircasing upto 100%, or a point between your current 40% and 100%?

Plimsoll123

Hello,

Thanks all for your responses. To answer your questions, Yes I have always made my repayments on time, and I intend to do so.

Woolwich won't lend with ANY kind of shop below, not just a bookies. This is a change in their policy since Barclays bought them.

I want to staircase between 40% and 70%, I cannot afford to go to 100%

There may not be much I can do aside from changing lenders completely. I just think it's ethically wrong for Woolwich to lend initially, but there now being no way to buy further equity - they've changed the rules, leaving no option but to switch lenders and incur a higher rate of interest, and possibly additional fees, etc.

Part of reason for raising this issue is to help others considering shared ownership to be mindful of the consequences of buying above a shop (of any kind).

I think this is a terrible policy on Woolwich/Barclay's behalf - London needs many more flats, and some of these will need to be located above shops. Flats above shops tend to be cheaper - so they're basically restricting lending to wealthier people.

Yet another bank imposed restriction on those trying to get on the property ladder.

Thanks everyone for your input - it's all helpful!

opinions4u

Have you thought that flats above shops are cheaper because mortgage funds are restricted, so your buyers are more likely to be cash buyers?

Yon may be about to find yourself in a trap. A shared ownership remortgage on a flat above a shop may be near impossible to place.

And if you wish to move your pool of potential buyers will be very restricted.

Plimsoll123

Cash buyers: exactly - the wealthy. And yes this is a trap. Lured into taking up a mortgage with Woolwich/Barclays, and now unable to own my flat outright, unless I want to end up paying thousands more.

Quote for the day "Just when you think you've got a foot on the housing ladder Barclays takes away a rung (or two)"

amnblog

Plimsoll123 wrote: »

Woolwich won't lend with ANY kind of shop below, not just a bookies.

This is not my understanding. Woolwich can still lend above shops depending on valuers comment.

In your case they seemed to have taken a view not to and this may be a view on the overall security, not just the fact it is over a shop.

ACG

Jesus wept.

Woolwich/Barclays can lend to who they like when they like. They have criteria in place to protect their investors, customers and staff.

Criteria can change any time, not just on properties above a shop/shared ownership but also if you have kids, if you are on certain tax credits etc etc.

Have you thought that their rates may be lower because they are taking less risks and can therefore afford to reduce the rates?

You now have 2 options, go and cry and moan and come up with how its a rich mans world and woolwich are this that and the other or you can get on with life and try and find a way forward... yes it may cost more in the long run but unfortunately thats part of life it wont run perfectly.

Woolwich owe you nothing, they helped you get on the property ladder, they dont have to help you up it.

Im all for helping people but when you come up with daft posts it really annoys me as it neither use nor ornament as my gran would say.