Scuppered by the neighbours

Mover555

I've had an offer accepted on a great property but everything has gone wrong.

The survey got canceled a week before it was due. I rang the mortgage company (Virgin money) and they said the surveyor had done a drive-by and advised the neighbouring property (they are two semis with one shared wall) was an unrepaired PRC and they couldn't proceed. Though the house I want to buy is repaired, the fact that the neighbour isn't is against Virgin's lending policy.

I have been told that some other mortgage providers will lend in this circumstance. The estate agent helpfully provided the name of an IFA who can organise it all for us but who has warned it's likely to be more expensive than Virgin. This is a bit of a warning sign for me - I'm low risk with a good deposit. I don't want to pay a premium. A limited mortgage market also worries me for when I come to sell on this home. Am I right?

What I could also do with advice on is whether a PRC house really is a sound investment. This house isn't cheap - it expensive because of the area. I've noticed damp on the internal walls. Is this going to be a problem to fix and are general repairs more difficult?

It's unlikely the neighbouring property will get fixed - it's housing association with zero funding for this. I asked them.

Thanks for your advice.

anselld

You are right. Find something else.

smnberryman

What's an unrepaired PRC?

kingstreet

Pre-cast Reinforced Concrete.

Probably considered defective under the 1984 & 1985 Housing Acts and considered unmortgageable by most lenders, unless subject to an approved scheme of repair and certification.

PixelPound

For a mortgage to be accepted on the house it will need to have a certification that the repair work was done to an acceptable standard, ask the vendor they may have one, if not you will need to employ an approved structural engineer to carry out an inspection and retrospectively issue a certificate - this will cost at least £900 (you need a SE who is approved to do certification). Do you know what type of build it was (there were many types done in the post war years).

You may also want to find out who did the repairs, often it was the council, and if so its likely they did it to a high standard - but didn't usually issue certificates so if it was bought under RTB then there probably never was one issued. If it was repaired privately, then it might not be to high standard.

After the housing act council houses that were deemed unfit were either demolished or repaired. The repairs Leeds Council did was to effectively remove the external PRC walls, replace with dense concrete blocks and put an outer layer of brick then insulate the cavity (it became one of the standard repair procedures). If you had already purchased your house then there were grants available, but due to the cost of repairs if you were doing it privately, even with a grant, meant that people opted for a less high standard, such as simply building an outer layer of brick and leaving most of the PRC if it was not showing signs of deterioration. It would have then been repaired enough but doesn't mean that now 20+ years later you might not have problems.

So to two questions, cost of repairs and whether a sound investment. The repairs may well be more - even with the high standard repairs where all the external walls were replaced, they left the internal walls untouched, so they are still PRC. This includes the party both properties share. So I'm not sure if repairs cost more, as its just concrete walls, but there could be repairs needed due to it being PRC.

As to sound investment, that depends on what price you pay for it. They will now no longer fetch the same price as standard builds, due to the adding mortgage complications. Pre-crash prices were the same as most mortgage companies never asked for certification. When I was looking at one to buy (hence why I acquired this knowledge ) a few months ago, standard 2 beds in the area were selling at £130K, repaired PRC were on for £99K but not selling. The one I was looking at had been knocked down over six months to £75K and was bought for cash at £70K (it was a repo and so having to pay for certification with the risk of losing out in a bidding war meant we discounted it). So if the price is as high as standard, walk away unless you never intend to sell it.

Westminster

Its the vendors who have been scuppered - I would walk away rapidly in your situation.

audigex

Definitely walk away - it's a headache waiting to happen: even if you don't have problems while living in the house, when you come to sell you'll find it much harder to get a buyer, as many lenders won't touch unrepaired PRC homes, and many buyers won't touch them even if repaired!

Mover555

Thank you all for the help and advice. It's a bit heartbreaking as we love the house but there's just too much against it. The price is one thing - it's at the too of our budget so for us not to get a solid investment feels scary. Plus we've no idea if the house itself has a proper certificate. The estate agent doesn't know so that feels like an issue waiting to happen. And the alternative mortgage providers that the estate agent suggested won't lend the amount we need. So it's pretty academic as well logical - we're walking away and have two new viewings for houses this afternoon.
Thanks again MSE people - you confirmed our worst fears! It's no good.

PixelPound

Getting emotionally attached to houses is a problem sometimes . You mention price as one thing, so for academic postulation, if the price was much lower, would this make the house a possibility or in the cold light of day there is too much against it? You could make a case for 25% reduction in price, if put research into it, which might make it within affordable rates, but depends on if the vendor is deluded to the realistic price.

Mover555

Thanks Nic - we did discuss this possibility. The offer we could make with one of the alternative mortgage companies is nearly £40k below our accepted offer. It's possible the owner would accept if no one else can raise the funds, but we're left with the other issues which have slowly made the house less desirable. Maintaining a non-standard build is one. Even if it's a fixed PRC, the interior walls are prob still concrete and I have seen damp on one. Secondly the neighbouring property being unlikely to be fixed makes resale a worry.
The house still has my heart but not my head. We've withdrawn our offer and walked away.