90% LTV mortgage on new flat declined as 'too many flats in development'

llk581988

We have finally (after months of looking) had an offer on a property accepted at 365k. It's a new 2 bed flat, on the second floor, in Surrey.

We have a 10% deposit and, although we were aware that 90% LTV mortgages on new build flats are very rare, we managed to get an AIP with Skipton. We were advised that we are their 'ideal customers', we pass the affordability tests easily and have no debts.

However, we have just been informed today that Skipton have declined the mortgage application as there are too many apartments in the development (there are 18). Apparently, the underwriters have said that the maximum in a development for that particular mortgage is 15 flats.

Our mortgage adviser has never heard of this before (he has over 30 years experience). Has anyone else heard of this? Why would having 18 flats make it more risky than a development of 15 flats?

Can anyone shed any light on this?

Thanks!!

Thrugelmir

Lenders can decline your application for any reason they wish. Your time would be better spent sourcing an alternative lender. Than trying to understand why without ever getting a proper explanation. .

llk581988

Thrugelmir wrote: »

Lenders can decline your application for any reason they wish. Your time would be better spent sourcing an alternative lender. Than trying to understand why without ever getting a proper explanation. .

Yes, we are trying to find another lender but 90% LTV mortgages on new build flats are extremely rare. We are aware of 2 lenders, one of which has declined us and the other has a 300k cap on the amount they will borrow (we need to borrow 329k).

westernpromise

It's probbaly because once a development gets above a threshold size, the lender could in the event of a repossession be competing to sell it against a builder who is offering identical but new ones at the same price. It is quite a well known thing that second-hand new builds change hamnds for less than what the new ones are selling for (which may still be more than you paid).

I can't see why 18 is worse than 15 but they have to set a threshold somewhere.

As others have said, the answer's not going to change so you need either a different lender or a different property.