Financing a Property Mid-Renovation

Peachy198

Hi all,


Hoping someone will be able to answer a question on what I assumed would be a very popular kind of transaction, but can't find any info online!


We have put in an offer for a property which is almost completely renovated, however we have recently found out that it does not have its building regs compliance certificate. From talking to the estate agent, we believe the current owners have had the council out to inspect at various stages of the renovation, but now they are selling up with only a few loose ends to tie up before gaining the final certificate. If our offer is accepted, we intend to continue with the works and finalise the certification ourselves.


Now, we are hoping to finance the purchase with a mortgage, but I'm sure the lender will be tetchy about paying out without the building regs certificate. So, does anyone know what kind of assurance the lender would usually require in this instance? Confirmation of the staged approvals from the council? Would a comprehensive survey suffice? I assume an indemnity policy wouldn't help, as the council is already involved?


[Not sure whether it makes a difference, but we would only be requesting a mortgage for the purchase price, and not the additional building works].


We will be seeing a mortgage specialist at our bank next week, but our experience of them in the past was more "computer-says-no"!! Fingers crossed we will see a better specialist this time, but your thoughts/experiences of this would be much appreciated in the mean-time!


Thanks,
Pamela

davidmcn

Is there a good reason why the seller can't deal with the "few loose ends" themselves?

Generally though, mainstream lenders aren't going to be interested in taking on something which isn't yet complete, no matter what sort of surveys or additional information you can obtain.

Peachy198

Oh... not what I wanted to hear!!

This is the seller’s second property, which we believe they need to release the equity from relatively quickly. We’re not sure what the extent of the “loose ends” are yet (the council won’t release the info to us as we’re not the owners), so it could be that the cash outlay isn’t feasible for the current owners.

To be honest, the estate agents haven’t managed to get much information from the seller which is a worry, BUT we’ve finally found a beautiful property after a 2.5 year search...

I guess it will just end up being a cash-buyer’s beautiful property though!

Davesnave

Consider the situation impassively. You have a seller who's in difficult financial circumstances, failed to complete the build and can't even give a prospective buyer information about what was proposed, what's done and what's still required.

This strongly suggests someone who's disorganised and maybe not experienced in renovation work, so regardless of the property seeming 'beautiful,' I would be looking at it very carefully.

Is it the particular position and potential of the house that makes it desirable? I've been in your position myself as a cash buyer, yet I've still walked away from the property, because when examined closely from a building perspective, putting right all the wrongs done to it was just too expensive.

In short, people who mess up like this tend not to be very good or to use the best tradespersons. Tread warily.