Finding a mortgage for new flat above commercial property

Regan55

My son has, at the last minute, been turned down for a mortgage for (as the title says) a brand new flat, 2 stories above a commercial premises. He had the “Mortgage in principle” and the estate agent has his name on it.........

Question is.........who, if any lenders, actually lends for these properties. I just can’t believe every property above commercials is “ONLY” for cash buyers.

Just had to tell my son (Away, he’s in the Army) that he may have to pull out and forget it, and he’s not a happy bunny at the moment. :mad:

ACG

There are not many lenders who will do it.

The devil is in the detail, if it is above or very close to fast food outlets, pubs/bars, launderettes, bookies, mechanics/workshops then you are going to struggle.

If it is above a shop that sells buttons and non of the above within a couple of doors either side then you should have options. It is probably worthwhile speaking to a broker who can get the property checked before making any more applications.

Regan55

It’s a Brand new build...........Coop supermarket takes up most of it. A small papa johns (��) takeaway at one side. 2 floors of flats above, (16 I think in total) shops are not even up and running as yet

His flat (��) was on the top floor above the Supermarket. He has gone down the “broker” route, and after the Halifax turning him down straight away, “Avalon” (I think) gave him the “mortgage in principle”

Everything has been progressing nicely since before Christmas, and this morning they dropped the bombshell, that they will not lend. :mad:

amnblog

As ACG says

Each property is considered on its own merits although a number of Lenders will reject them out of hand.

Above restaurants are a particular problem, and especially take-aways. We had one for example above a funeral parlour that the Lender did not like.

When such a property arrives on the desk of an experienced broker they will do a lot of research before the case even goes to a Lender.

'Avalon' sounds a great name for a Lender but does not exist. Presumably the Broker is now looking at other options?

woolythoughts

just an aside, I think the OP is in Bridgwater - flats above a co-op and papa johns......... unless by coincidence there are two such developments being finished at exactly the same time.

ACG

I am trying to think who Avalon could be but I am struggling (Vida maybe?).

The Papa Johns will probably be the issue even if not directly above it.

I tend to have a go to lender for this sort of thing, if they say no then I start to struggle. See how the broker gets on with this second lender, but I would be asking them to get the issue of it being above commercial/take aways signed off before paying for a valuation.

Regan55

I got the Avalon bit wrong...........it was/is Accord ��

How do you know Wooly?

woolythoughts

Probably because I am also from the area so know exactly which flats you mean......its a small world

amnblog

Accord will want at least 3 stories in the block of flats and at least 15% deposit (assuming newly built).

Regan55

amnblog wrote: »

Accord will want at least 3 stories in the block of flats and at least 15% deposit (assuming newly built).

He has got a healthy deposit, care of bank of mum/dad.......but didn’t know about the 3 story bit.

Back to square one 🙄

YHM

Have you got a broker instructed on this? They should be able to find a lender for you with some research...