Selling property adjacent to commercial property

ClaireB45

We bought our house in a very small Sheffield village in 2007. For work reasons we had to relocate to Manchester in 2013 and the house has been rented out since then.

Our long term tenants are now in a position to buy the house which is perfect timing for all of us. However, Natwest have just declined their mortgage offer because the house is adjacent to a chemist, threatening to bring down our whole chain. EServ have carried out what looks like a drive-by valuation and commented it is next to a "large chemist". It's actually a very, very small village pharmacy, but I assume we have no come back on the accuracy of the valuer's comments?

I've read elsewhere that NatWest were one of the more flexible lenders when looking at this on a case-by-case basis, so I'm now pretty concerned to hear that our house is "unmortgageable". Can't help but feel we've been done over by an inaccurate valuation, it's in a very residential area surrounded by other houses and no other businesses except a family run garage down the main road (don't think that was an issue in the valuation). Is this just NatWest being picky or should we be more concerned that we have a bigger problem selling the house? I don't know what to think.

Our tenants are using a financial advisor who is looking for another lender but I'm not sure if I should have confidence in that - is this the kind of issue the financial advisor should already know the lender's position on? It seems to be as much of a shock to the IFA as the rest of us.

Any advice for us or our buyers greatly appreciated.

Claire

amnblog

These properties are always subject to values comments. The Lender relies on the valuer to advise them on whether the property is suitable security.

So, no, the Adviser cannot know beforehand. A similar property elsewhere could possibly be Mortgaged with Nat West.

Your buyer will probably be directed to a new Lender who will not ordinarily use Esurv and they will try again.

ClaireB45

Following on from this: Our tenant/buyers have been back in touch to say their IFA has tried the other lenders available to them and they've all implied the same thing - that they would be unlikely to lend against this property! Surely that can't now be the case that all homes in the UK next to any commercial property have become worthless?!

Has anybody been able to resolve an issue like this in past or can suggest any lender to try?

silvercar

Do you have a mortgage, or have you done so in the past?

ClaireB45

Yes, we have a mortgage with Chelsea Building Society taken out 11 years ago. But even they have said their criteria has changed since then and they may not be willing to lend against it again.

Gomme

We are having similar problems before even getting to full application. In a town so you'd think living next to a shop would be more expected, even in a mainly residential area.

Existence of previous mortgage where it was no issue seems to have no bearing whatsoever, nor LTV ratio.

Virgin Money have a blanket No policy. Broker suggests Natwest but stresses it depends on valuers' comments, probably unfavourable to go by your experience. Even local building society who know it's a thriving high demand area seem doubtful, something to do with underwriters.

Is this state of affairs really here to stay? Just doesn't add up - it's beyond belief that in the unlikely event of repossession the house could not fetch a reasonable price. Also more generally this must discourage change of use from commercial to residential if there are any other shops nearby.

Sorry, all little help, Did you got any further?

ACG

Being opposite commercial property can be a problem, but a chemist? First on me.

If it were a pub/take away/off license/mechanics/knocking shop I could understand but a chemist!

ACG

Im assuming there is not a queue outside of people waiting for methadone?

amnblog

Only the OP!

As we point out to Clients, buying adjacent to, over commercial, or non standard construction is not just about obtaining lending. Resale needs to be considered at outset.

Thrugelmir

ClaireB45 wrote: »

thing - that they would be unlikely to lend against this property! Surely that can't now be the case that all homes in the UK next to any commercial property have become worthless?!

Not worthless just difficult to sell. Lender requires a property that is easily saleable in the event that the mortgagee defaults. Fast food outlets for example pop up everywhere these days. Change of use is the the issue. Irrespective of what it currently is.

Gomme

As we point out to Clients, buying adjacent to, over commercial, or non standard construction is not just about obtaining lending. Resale needs to be considered at outset.

But lending is the crux here, not resale. In the OP's case they bought and now there is (or was) a buyer-in-waiting. In our case we bought and now estate agents have no qualms there would be buyers if we were trying to sell. This is a problem created by lenders' newfound inflexibility.

And no such advice was being given at outset when we bought - then it just wasn't an issue.