Mortgage on property which "needs modernisation"

KayTM

I hope this is just a hypothetical question. (It depends on whether our expected purchase goes through.)

I've seen a property which requires modernisation. It's a complete mess but it is habitable (if you're not fussy) - there are people living there. Well, there was a cat and it was still alive!

Say the property was offered for £150k, approximately how much money would you need to put down on it?

I expect you'd need a low LTV. How high could you go, though? 90%, 85%, 80%? And then you'd need the money to do it up. Is this likely to be very difficult to get a mortgage on?

At its most basic, a big skip to remove all the "stuff" would do for starters, although we'd plan to do a lot more, eg new kitchen, bathroom, etc, etc. Are lenders very cautious about lending on property which has been rented out and is now somewhat neglected (to put it mildly)? It's a reasonably good location (probably the worst house in the street), and presumably structurally sound (we'd get a survey). Would a lender run a mile because it needs a bit of work to make it attractive?

KayTM

As it happens, that particular property has been sold now, even though it still appears to be on the market.

However, it's something that I and other people might be considering so any answers would be helpful for future reference.

fashionvictim

I've looked at a number of doer uppers, and had my heart set on an auction property. I found someone to do a full structural survey it was 695 +VAT, so depends if you want to pay this out and then walk away from the property



Your mortgage lender would do a valuation on property and if they have concerns they may so no to lending or they may insist on a survey or structural survey through their approved surveyors (which you have to pay for again) So it's a risk..

Now I am going to buy a new build instead

I had a homebuyers survey on my current property which had been rented out for 20 years and was in a state and it made it sound terrible, but no problem getting the mortgage. There was no sign of any structural and as dirty as it was, it had a kitchen & bathroom plus heating.

I think if there is any cracks, bad damp, moving floors etc, unlevel etc then you are more likely to struggle

I wish I has the cash & time to do a doer upper !

KayTM

Thanks! In other words, dirt and ancient infrastructure won't put them off. It's just the basic structure they're interested in.

I was a little concerned that they'd turn their noses up in disgust because it's not quite the norm.

PS: It would be nice if estate agents removed properties which are no longer for sale or at least put an SSTC notice on them.

PixelPound

Unless it's falling down you are probably okay, Valuations are often cursory. Cracks aren't a problem unless they are still moving but in getting a full structural survey you may need to ensure you get a good qualified engineer and go round with them if you can add they'll give more advice than goes on their report

stator

Things like poor decoration aren't a problem, whether it's out of date or just been completely worn out.
Signs of damp, leaks, or dangerous gas or electrics might put a spanner in the works.
As long as it's habbitable you will get some kind of value and in my experience they are quite realistic too. If the price is right you should be able to go all the way up to 95%.

fashionvictim

Will you have the spare cash to do the initial work? Are you going to do it yourself?

I had to bleach the bathroom in our flat as we could not afford to replace everything when we first moved in. It was really horrible, I said I would never use it, but needs must ! It scrubbed up Ok.

A lot of my friends seemed a bit shocked about my olive green bathroom with red tiles, when rest of place had been modernised. We did cheap fix's like new toilet seat and painted the walks and pipes white. Took 4 years to get the bathroom redone, life & bills just gets in the way!

My boyfriend did the kitchen, took him sooooo long but saved money!

And my main tip is find a local double glazing company rather than a famous one, much cheaper if you need to replace the windows.

fashionvictim

On and my flat (which is all shiney and lovely now) is under offer .. but it says removed from market on Right move !

KayTM

Well, that property has been sold now, but armed with the information on this thread (thanks!), I'd not rule out a doer-upper in future if our current purchase falls through. (Still waiting to exchange.)

Yes, I'd expect us to find the money to fix it ourselves rather than trying to borrow to do it. The money saved on the purchase price would help too!