First Time Buyer Questions - Commercial Below - Scotland

1923VC

Hello there

We are in the process of buying our first property in Edinburgh at the moment

It is a 2 bedroom flat above some commercial units (a high street chemist and a barbers shop i believe). There is a row of shops and at one end is a takeaway (note its not above the flat we have had an offer accepted on and is infact down the street)

Now I did not know this was an issue and our solicitor does not seem to think it will be either but the mortgage broker we have spoken to has said they lenders may well only lend subject to valuers comments and seems to be making a general fuss about the takeaway down the street.

Spoke to our solicitor who said that she didnt think we would have an issue and that there are lots and lots of properties in the city above commercial units, these obviously will not all be cash buyers. The market here is also currently very buoyant.

So now we do not know what to do, the missives are not concluded as far as I am aware after discussing with our solicitor so we could still pull out, we haven't started trying to get a mortgage yet (meeting the broker this week who will make application for us) so we don't know if we should just pull out or try and get it through, its turned into a bit of a nightmare.

To be honest we did not even know this was an issue being above commercial and if we hadn't spoken to this broker we would no doubt have just ploughed on.

Any one with any advice in a similar situation would be welcome. We arent intending this to be the only flat we ever own and may want to move on in 2-3 years or so so not sure if a change of use would be an issue below and I believe in Scotland it isn't as simple to change use as it is in England etc?

Cheers

kingstreet

The broker is correct.

Meet with them, see what they come up with. If you decide not to proceed now, you'll never know...

1923VC

That is what we were thinking, have a go and see what the broker comes up with. If it comes back a no from lenders or there's anything flagged up by them which suggests that this is a bad idea then take it on the chin and withdraw.

Nothing was flagged up in the home report and it does say it is suitable security for mortgage purposes but I believe that lenders also carry out their own valuation and thats were the issue would come from.

kingstreet

Ask the broker to establish the survey firm used by the suggested lender and to ask them their likely view before making an application.

For example, LBG uses Colleys its in-house survey arm;-

https://www.colleys.co.uk

1923VC

I believe the lenders he is recommending are Nationwide & HSBC, but yes, I will ask him.

We are taking the view that there is a risk with everything and really it comes down to whether it is possible to get a mortgage on the property.

We don't really want to be in the situation a few years down the line where we cannot sell because another buyer cannot get one or we try and re-mortgage and cannot but I suppose that's the risk you take to an extent.

I think if it looks likely we will or will not be able to proceed that that will be telling us what the answer is.

fewcloudy

1923VC wrote: »

I believe the lenders he is recommending are Nationwide & HSBC, but yes, I will ask him.

We are taking the view that there is a risk with everything and really it comes down to whether it is possible to get a mortgage on the property.

We don't really want to be in the situation a few years down the line where we cannot sell because another buyer cannot get one or we try and re-mortgage and cannot but I suppose that's the risk you take to an extent.

I think if it looks likely we will or will not be able to proceed that that will be telling us what the answer is.

I live in Edinburgh, and have been very well aware of the difficulty in getting a mortgage for a flat above commercial premises. I'm really surprised your solicitor isn't, esp as there are a great number of flats above commercial premises in this city.


It's not so much the tenements like you see all through Gorgie or Leith Walk, where the ground floor is a whole row of shops. In these case your property would be a different street number, the main door for the flat will be between 2 shops. That is my understanding of it.


The difficulty is when you are looking to buy a flat in a commercial block where one floor downstairs is a pub/take-away and the other floor above is you. Usually these are hard to sell and are a cash buyers market. I'd go with the brokers experience and advice for these type of properties in Edinburgh every time.

1923VC

Cool, thank you

Yeah its basically as you say, a row of commercial on the ground floor and a door in between up to tenement flats above. So the flat does have its own main door onto the main road. The flat we have an offer accepted on is on the first floor situated above the chemist and a barbers shop. Between the two there is a door and stairway up to the tenement flats above.

Yeah the conflicting information between what the solicitor and the broker are saying is causing confusion and if I am honest it has given us cold feet a little whether this is the right thing to do. The solicitor simply does not think it is an issue whatsoever and could understand it if there was a pub/takeaway right below as you say.

fewcloudy

I can only assume solicitor and broker are both basing their advice on their own experiences, and their understanding of just what the situation is here. Broker has probably had a fair number of difficult cases on something above commercial premises, so is throwing down a warning early doors to make you aware there might be a lending issue.
But there are a large number of streets here, all the tenements, where the entire street is shops on the ground floor, and up to 4 floors above with 2 or 3 flats on each landing. I don't think there is a problem in the majority of those.

1923VC

Thanks Fewcloudy, yeah I am hoping that is the case. As you say, they are everywhere and I just cannot see how any of them do not have a mortgage on them. And it is a tenement which does have its own street number as you mentioned in your first post.

We will see what happens. As I was saying, as far as I am aware we are still in a position to be able to withdraw should anything untoward happen.

Thanks