Mortgage on flat in building converted from offices

hjd

My son is trying to buy a one bedroom second floor flat in a building that has been converted from offices.
He has LTV of 44% and the mortgage requested is just over 3.5x his income.
Broker recommended Nationwide. Application submitted late April; text to say it had been received.
Valuation was done 5/5.
Message from the broker yesterday. A bit confused and son has not yet spoken to broker. First thing was Nationwide are over-exposed on that postcode, next that they wouldn't lend due to building construction.
We don't know the details yet; hope to find out soon.
Solicitor is acting for 12 of the 16 buyers. She says that Nationwide, HSBC and Halifax (I think) have all refused to lend due to the construction.
One buyer has got a mortgage with NatWest.
Broker has emailed to say "I have spoken to our Santander Account manager who has advised that there should be no issues" and advised him to apply with them.

This flat is just what he wants but we are wondering if these are warning signs, even if he gets a mortgage now what would resale be like? He is unlikely to stay in the flat for too many years. Pulling out now would mean the loss of his deposit and of some costs incurred.
If he does decide to go ahead, what are Santander like to deal with and for speed?
Does anyone have any idea what the problem with the construction might be, based on rejections so far, and suggestions for suitable mortgage companies if he does decide to go ahead?
Not wholly convinced by mortgage broker but we have never used one ourselves so have nothing with which to compare him.
Thanks in advance for any help.

davidmcn

hjd wrote: »

Does anyone have any idea what the problem with the construction might be, based on rejections so far, and suggestions for suitable mortgage companies if he does decide to go ahead?

I doubt any of us can help unless you tell us what the construction method is - if you can't find that out from the valuer then presumably the solicitor knows?

The valuer ought to have taken the difficulty with mortgageability into account when valuing, but you're right in being concerned that it might not be easy to shift when the time comes to sell.

AnotherJoe

I think its more likely that rather than the construction method, they dont like the fact its converted from offices. So they think it will be difficult to resell, which it unsurprisingly will be if they dont like it on principle ("we dont like it because we wont lend on it because we dont like it because ...") , its a vicious spiral.

These are great ways of creating city centre dwellings, cutting down on commuting, proving accomodation where otherwise theres empty unused space, etf etc and their stupid attitudes make the job of increasing the housing supply, all the more difficult for no good reason. Its the same businesses who wont let someone move from a 5% mortgage to a 3% one because they cant afford a 7% one.

In your sons case its potentially Catch 22. Maybe he can get the flat at a knock down price due to this, if he cant well if he isn't in this for the long term then unfortunately its probably not a good buy for him.