Survey said 'un-mortgagable'

HalfPint

Hi,

Our buyer for our flat has just pulled out. Their mortgage application was turned down as the mortgage surveyor stated in her report that the flat was in her opinion 'un-mortgagable'.

We are now concerned that we have an problem which may prevent us from selling (or selling easily).

How can I find out what the issue may be? The mortgage company are refusing to issue a report.

We live in an ex-council 1950's style block of 6 flats. We have a mortgage on it (10 years ago and had no problem obtaining it) and there are 3 other flats in the block which are owned. The other 2 remain council owned.

The property we wanted to rent has now obviously fallen through and we are having to start all over again.

Any advice is much appreciated.

Thanks.

HP x

LateStarter

Hello - sorry about your bad news - have you considered paying for your own survey?

Better_Days

Very hard to advise without knowing what the problem is.

Would your solicitor or EA be willing to approach the mortgage surveyor for an indication of the problem?

Did you get a survey when you purchased the flat and if so what does it say about the construction of the block?

kingstreet

Construction method? Future saleability? Remaining lease term? Percentage still council owned higher than lender accepts?

Could be any number of reasons. Couldn't your selling agent ask your buyer and find out?

Kevie192

So your buyer paid for a survey but the surveyor is refusing to issue them with a report?!

Or have you not asked your (ex)buyer ?

pinkteapot

Kevie192 wrote: »

So your buyer paid for a survey but the surveyor is refusing to issue them with a report?!

If the buyer only paid for a valuation survey then they won't necessarily get the report. The valuation survey is conducted on behalf of the mortgage lender (though the lender makes the buyer foot the bill). The lender is the customer and they get the report.

A lot of banks do send a copy of the valuation report to the buyer as a courtesy, but they're under no obligation to.

If the buyer paid to upgrade to a Homebuyers or Building report then they'd get that and it would be their report.

ADChick

I work in mortgages and there could be a number of reasons as to why. I only know the bank I work for's policy but it might be of use.

You say it's a block of 6 flats? Is it 6 storeys? We wouldn't lend on that unless it's in London. Also a working lift can affect it? Any retail units in the flat?

The split of council owned and private owned doesn't effect us, but I know some lenders do take that into account. If the person who was buying it was to ask, I am sure they could find out why, just depends if they are willing to help you or not!

princeofpounds

Perhaps find out which surveying firm was used and ask them for a valuation survey that addresses this issue (won't cost that much compared to other survey forms)

To be honest, it is weird that the mortgage company would not disclose the reason for refusal to the buyer. Even if they don't send through the report, they will typically say why.

kingstreet

The valuer may have decided to save the purchaser the valuation fee and simply say it wasn't mortgageable, so he didn't value it.

HalfPint

Hi all, thanks for responses.

We haven't yet considered doing our own survey.

EA has approached mortgage broker, who say the mortgage company refuse to issue report, or copy of. He was told the mortgage was declined because in the surveyors opinion the property wasn't mortgagable.

No idea if a survey was done, assuming yes, when Mr H bought the flat. Solicitor has all the paperwork but I don't know if that report is in there, so I can't check what the construction is from that. As far as we know there was nothing untoward back then.

The lease still has 98 years left. The council own 2 flats, 2 are owner occupied, the other 2 are buy to lets (private landlords). Both sold in the past few years.

It's a 3 storey block, 2 flats per floor. No lift, just 3 flights of stairs. No retail units. residential area (old council estate).

Buyers are nice people and live locally. They've asked for an explanation but none is forthcoming.

HP x

Edited to add: we've been told it was based on the surveyors 'opinion' rather than something specific wrong.

tea-bag

I have a unmortgageable flat. It is the construction it is a prefab concrete. I just rent it.