Mortgage declined because of "student area"

stator

I honestly can't see why an HMO restriction would have that much of an effect in the long term. It may be temporary uncertainty they are just waiting for things to settle down, ie they are afraid house prices might fall because HMO landlords are no longer interested.

JWest

stator wrote: »

I honestly can't see why an HMO restriction would have that much of an effect in the long term. It may be temporary uncertainty they are just waiting for things to settle down, ie they are afraid house prices might fall because HMO landlords are no longer interested.

I can't see the problem either. It's a lovely house at a good price, on a street with no real student presence, which just happens to be in a postcode with a large percentage of student lets. It's just that the mortgage company's response has made me jittery, and now I'm starting to get paranoid!

Zoology_Dragon

I don't follow the logic about non-students being unable to buy? Why not?

We've just bought a house in what sounds like similar circumstances. The are we've bought in is pretty studenty and has a maximum HMO restriction. However, the restriction applies to the whole of the city (York, which also has two universities), I don't know whether this makes a difference.

Quite honestly, knowing that our street can't ever become more studenty, as it's already at the allowed limit, was a plus point for us.

Zoology_Dragon

Oh wait, do we mean that non-students can't buy because banks won't lend?

stator

Zoology_Dragon wrote: »

Oh wait, do we mean that non-students can't buy because banks won't lend?

Yes, that's what people were saying. If banks won't lend most owner occupiers couldn't buy and with the HMO restriction most student landlords wouldn't buy. Of course there are other people, cash buyers and non HMO landlords who would buy if the price was right.

Mokka

This seems very odd. What we've done when we had a difficult to mortgage property is to ask the lenders' advisors outright how they would look at the problematic issues. The advisor usually calls the underwriters who tell them the more detailed interpretation of their lending criteria.

Have you tried direct access lenders? They might have better rates anyway. TSB seems to be very customer-hungry.

moneyistooshorttomention

I was in pretty much that situation when I came to sell my last house, ie the area had been somewhat student-y and had become more so and the local Council had put in place HMO restrictions to prevent it turning even more student-y.

It did impact on me I feel. There were potential buyers that maybe got ruled out of the equation because there was a bit of a knock-on effect back to even the level of house I was in (ie pretty small). I have a clear conscience - as I even told the estate agents who were marketing my house (and...yep...they really were "ethical estate agents" and Inoticed they duly amended their info. on my and other houses accordingly to tell people). Those EA's hadn't even realised the fallout effect there was on smaller houses like mine until I told them (but I took the pragmatic view that I wouldn't want a buy-to-letter to find out part way through purchasing my house and then expecting to gazunder me or drop me as a consequence).

If it was going to have an impact on me, then my decision was to take the force of that impact right at the start.

I wasn't happy. I was aware students had devalued my property to a small extent:mad::eek::mad:. I could spit feathers about it...because I figure their impact cost me a few thousand £s of money I cant afford to lose.

But I had no choice but to take the view "It is what it is" and curse volubly (not so much) under my breath that they had taken away a bit of my "house equity".

Part of the reason I sold (out of the many reasons) was before I lost any more of my due house equity courtesy of that.

My (very rough) guess is that they cost me around £10,000!!!!

anselld

moneyistooshorttomention wrote: »

I was aware students had devalued my property

Nothing to do with the students, they have to live somewhere. The people who devalued your property were the planners who bring in these restrictions, usually well after the horse has bolted.

If the planners had not blundered in you would no-doubt have sold for a higher price to an investment buyer looking to convert to another student let.

moneyistooshorttomention

anselld wrote: »

Nothing to do with the students, they have to live somewhere. The people who devalued your property were the planners who bring in these restrictions, usually well after the horse has bolted.

If the planners had not blundered in you would no-doubt have sold for a higher price to an investment buyer looking to convert to another student let.

Not in my case personally, as I had calculated exactly what price a buy-to-letter needed to pay me for my house in order to get what they would deem a reasonable return on their money. With that, I knew the maximum they would really pay me and that any offer above that would likely result in them gazundering me at the last minute.

Hence a buy-to-letter that wanted my house came in handy for a bidding war in the event, but my house was sold to exactly who I had decided it would be sold to (ie a home-owner).

I was right with the planners on that, just with the proviso I wished they had done it "many moons before" darn it.

anselld

moneyistooshorttomention wrote: »

Not in my case personally, as I had calculated exactly what price a buy-to-letter needed to pay me for my house in order to get what they would deem a reasonable return on their money. With that, I knew the maximum they would really pay me and that any offer above that would likely result in them gazundering me at the last minute.

Hence a buy-to-letter that wanted my house came in handy for a bidding war in the event, but my house was sold to exactly who I had decided it would be sold to (ie a home-owner).

I was right with the planners on that, just with the proviso I wished they had done it "many moons before" darn it.

You said the Council brought in HMO restrictions... That is the point at which your property was devalued. Any BTL investor you involved after that point would have been looking at lower returns and therefore a lower price.