Remortgage declined due to council's right to first refusal

MattMorgan

Hi

I purchased my house just over 5 years ago from the council under the right to buy scheme.

I have recently attempted to remortgage the property via a broker. The broker has said that I have been refused a mortage by many of the lenders, not due to a poor credit history or lack of affordability, but because the council have the right to first refusal on my property for the next 5 years. My broker is stumped and hasn't seen this used as a reason to decline granting a mortgage before. Has anyone else come across this or had this problem?

M

dimbo61

https://www.gov.uk/right-to-buy-buying-your-council-home/selling-your-home

Now it states on the Gov.UK website that you have to offer the property back to your Old Landlord if you want to sell but you are just looking to remortgage.
Who did you get your first mortgage with ? could you look at a new deal with them ?

MattMorgan

Hi dimbo61

The first mortgage is with Halifax. I did speak to Halifax they do not do let to buy.

I understand the council has first refusal but I don't understand why that would worry lenders?

jonesMUFCforever

At what price could the council buy back the property?
If say the same price as 5 years ago then potentially the lender won't get their money back.