Section 106 concern... First time buyer.

SwiftWill

Hi all
I saw a few posts about section 106 on here in the past few years & wondering if anyone can shed some light on the matter for my plight!

I'm currently going through the process of buying a section 106 property in Andover, Hampshire (Test Valley BC). My solicitor (who was recommended to use by the estate agent) when sending various things to sign to me, picked this concerning issue up & are supposedly enquiring into this more for me but there recent replies haven't given me comfort & don't go into any detail.
I understand the tip of the iceberg stuff about 106 but was only offered Halifax & about 3 other small lenders who do this scheme when sorting out my mortgage.

What I really fear though is that when say my 2 year fix rate finishes with Halifax & I look to get another 'new' deal that Halifax might push the rates up really high or pull out of section 106 altogether in 2017 forcing me to go to the last few remaining ones such as Woolwich or Leeds.
Are there rules set by the government on a minimum number of lenders that must be under this scheme? What if they ALL pull out? What if there was no competition & Halifax raise their rates unfairly?
Or just as importantly if I want to sell & one of these scenarios happens?

I'm just very uncertain about if I take this gamble I may be corned into a situation.
I know there maybe routes to get 106 lifted if it's not applicable to the area anymore but I don't want to rely on this!

Can anyone help with my worries? I have only about 2/3 weeks to decide before I should exchange contracts. I'm really sad that this could be my road block as other than that it's perfect!
As much as Hoogle is great there is nothing going into great detail about this.

Thanks to anyone who can give me information or point me in the right direction!

Davesnave

You might be better posting this on Mortgages and Endowments, but many of the posters over there also come here.

I'm not sure by what means a government could force lenders in a free market to enter an area where they don't particularly want to be, except by monetary inducement. As Section 106 property exists, it seems likely that there will be lenders to service it, albeit at rates which aren't the best, and if that should change, then a fix of some kind would be arranged.

In saying this, I'm thinking of the scenario with property that has a high risk of flooding, where governments have made money available through a levy to enable insurers to offer continuing cover, naturally at a higher price than normal. That has similarities, but those properties might conceivably become worthless long term, whereas there is no physical threat to Section106 houses. Their status is purely artificial.

For that reason, I think 'gamble' is too strong a term to use here.

Richard_Webster

s106 agreements can say all sorts of things. Sometimes they simply mean that the developer of new property has to pay money to the highway authority for improving a nearby road andnothing to do with individual house owners. Other times there are restrictions on who can live in the houses built.

What does this one say?

Only then can anyone tell you what the issues might be.

kingstreet

If Halifax stops lending on S106 cases, it will do so on future cases. not ones it already holds.

As a consequence, you will have Halifax customer retention options based on the loan to value prevailing at the time your first deal ends.

You will have limited remortgage options if you only have a small pool of lenders to start with.

stator

You need to tell us exactly what the S106 is.

I pressume it is something like "This house can only be sold to local people" or similar?