Mortgage Rejected - 'Not Suitable Security'

bouicca21

That kind of building is untouchable for a mortgage even in up and coming areas of London. It's not just that it is ex LA, it's the type of construction. The 'rules' as given to me nearly three yeasrs ago were that exLA flats are ok if not more than 4 storeys and brick built. Mortgage companies weren't concerned about the borrower being hit by massive refurbishment costs, it was all about construction coupled with the percentage of flats that no longer had council tenants.

stefs4

OK, so based on what I've learned, it can either be the Co-Op on the ground floor or the construction (based on street view). But wouldn't construction be the issue AFTER they've physically visited it? How will they know if it's brick or not?

I also know that all tenants are private in that building now.

glosoli

They are likely to be familiar with the block in question, or similar blocks in the area.

stefs4

AFF8879 wrote: »

Normally if the property is not worth what the offer value was (in the opinion of the surveyor), the lender will come back with this specific feedback and possibly still a mortgage offer, just for less than was originally applied for.

With all the enquiries and investigations on tower blocks around the country post-Grenfell, its not surprising that lenders aren't touching them until there is some clearer guidance. That said, lenders would normally always steer clear of ex-LA tower blocks anyway though I did think London was an exception, if I correctly remember the wording on my offer from HSBC last year. The problem with ex-LAs is that the council still remains the freeholder and often lands the leaseholders with extortionate bills for works and repairs which sometimes renders the properties unsaleable.

Thanks for your reply. The property is under private management / freehold since 2005. All the residents - afaik - are private.

So I think it either has to do with construction (based on their street view), or the commercial premises - Coop.

keith969

If the cladding were deemed to be in need of replacement then the maintenance charges could be astronomical. Given that nobody probably knows at the moment, they don't want to take the risk, and neither should you...

DumbMuscle

stefs4 wrote: »

OK, so based on what I've learned, it can either be the Co-Op on the ground floor or the construction (based on street view). But wouldn't construction be the issue AFTER they've physically visited it? How will they know if it's brick or not?

I also know that all tenants are private in that building now.

We managed to work out the construction without physically visiting it. Valuers have street view too! (and probably more in-depth tools)

TonyMMM

An agent/surveyor friend of mine was telling me this week that there are now thousands (or possibly tens of thousands) of flats, and some houses, which have any sort of cladding involved that are now unmortgageable until the post Grenfell rules are sorted out, and that many may have to have very expensive reworking before becoming sellable again.

People trying to buy/sell are just starting to find out.

hazyjo

What sort of % deposit are you putting down?


It's 'share of freehold' - that very basically means you all have leases and prob own a share in a company that owns the freehold. Do they appoint a firm of managing agents to take control? That may well be the 'private management' you refer to - but you must make sure the Council aren't still the freeholders. And check what sort of service charge it currently has and what sinking fund and plans for future works (cladding/windows/roof/lift replacement, etc).


There are likely to be large service charges or bills due to the lift - not to mention any cladding issues, etc.


Bethnal Green may have 'up and come' in terms of price, but it still has its shabby sides, and has not had a particularly good reputation over the years. Things change (as is evident), but I can definitely see why this particular property would be considered a risk for their money.


Jx

teddysmum

It could possibly be a case of no sprinkler system. Our council is installing them in all blocks over three storeys.

Candyapple

When you click on the link it says: 'Sorry - this property is now Sold (subject to contract).'

Has it been removed from the market?