mortgage on ex council house with covenant

house_seller_2

Can anybody suggest a mortgage company that will lend on an ex-council house with a restrictive residential covenant (have to have lived in area for three years prior to buying).

My buyer has been to four mortgage companies - HSBC, Nationwide, Nat West and another, and they all said no because of the covenant. I had no problem when I bought it in 2002 prior to tightening of restrictions. The council won't remove the covenant unless it becomes "an issue".

Thanks

Blavatsky

This covennat is operated in South Oxforshire and there is an article on it on this is money site but I am not allowed to post the link.
Did the Council impose this restriction after you bought which if so this would be very unfair.Different if you knew about it when you bought.
However your best bet is to contact your local Councilor and/or your MP plus local paper if all else fails but try a softly softly approach first.Councils do not want heat from MP's

bryanb

Did you buy from council?

house_seller_2

I bought from the people who bought from the council, I knew about the covenant, but back then there was no trouble getting a mortgage. I want to help my buyer find a mortgage company who will lend to him, as we can't remove the covenant

iammumtoone

house_seller wrote: »

The council won't remove the covenant unless it becomes "an issue".

But it has become an issue, you cannot sell your house due to it!

ACG

Are there any local building societies? Try them?

house_seller_2

hi immutoone, only if it becomes an issue for them, not me!!

nationwide said no, but I guess he could try others, thanks for your replies everyone

bryanb

house_seller wrote: »

hi immutoone, only if it becomes an issue for them, not me!!

Make it an issue for them, solicitor's letter, threat of court, etc.

Mokka

It seems the council could remove the covenant if they wanted to. But you can't force them to do it (have you checked with a lawyer? What does the Housing Act say?)? Could the buyer's lawyer negotiate some concession? The covenant sounds completely irrational- what does the Council hope to gain by enforcing it- stem the influx of East European immigrants?

If the property has been sold under Right to Buy I am not entirely sure imposing this covenant was lawful. But I am not a lawyer and this is not something that was of concern to me, so haven't researched it personally.

Neese

We are buying with a restrictive covenant, but it was lessened by the local council as they wouldn't remove it fully. It's not ex council, but had the same restriction (had to live in local area for 3 years). The seller applied to the council to have it removed as they had problems selling, so the council offered to change it to selling to someone within the local area for the first 56 days, county for 56-90 day and then whole country after that. The seller had to pay to have it changed. Halifax are lending to us on this.

house_seller_2

Thanks Neese, that's what I'm looking for - who will actually lend on it, rather than having it lifted. I'll suggest Halifax to my buyer.

We already have that they'll lift the covenant if we can't sell within 6 months, but don't want to wait that long, and I'm not sure it would make any difference to the mortgage companies anyway, as it'll be back on there as soon as it's sold.