Lender rejected after survey .... London New Build

MrChrisLondon

Please help with some advice !

It's been a long few months negotiating on a new build house in North London (zone 3). After much back and forth and trying to use the buyers market to our advantage and leverage the fact the development has yet to sell a flat (they only have 6 to sell unlike the larger new build schemes) we agreed a fee of 530,000 and the property first went to market for 650,00.

Great we thought! Over 100k off asking price, decent size with a nice outdoor space, only £50 p/sqf above the area average and near a tube station.

But we just got our survey back from Barclays and they rejected the property because on the 2nd floor there was / is a boxing gym that they plan to turn into more flats but are yet to get the planning permission (this may get rejected and probably take a year).

Estate agent urging us the surveyor did a bad job and for us to look for another lender but I am now worried if we get a lender that does a lazy survey to push the sale.

Hypothetically how much would the commercial space affect my potential properties value? Should I just walk away ?

csgohan4

have you tried a broker to match a lender to your circumstances?

eddddy

MrChrisLondon wrote: »

Estate agent urging us the surveyor did a bad job and for us to look for another lender but I am now worried if we get a lender that does a lazy survey to push the sale.

Hypothetically how much would the commercial space affect my potential properties value? Should I just walk away ?

You might be able to find another mortgage lender who would lend on this property.

But I guess your main concern is about resaleability and resale value.

If the boxing gym remains, buyers will have the same concerns as you, and the same mortgage challenges - so they might look for the same type of 'discount' that you are getting.


BUT... if the gym gets converted to flats, the value of your flat might jump, leaving you with a nice profit.


BUT... the gym is probably planning class "D2 Assemblies and Leisure" - so it can change into any of the following without needing any planning consent:

• Cinemas,
• Music and concert halls,
• bingo and dance halls (but not night clubs),
• swimming baths,
• skating rinks,

So if it became a bingo hall, for example, it might reduce the resaleability and resale value of the flat even further.

Pixie5740

It's a bit harsh to call the surveyor lazy when it's the developer who hasn't secured the necessary planning permission yet. I wonder why the developer has not been able to sell 6 flats and is knocking £100k off the price. I doubt it has anything to do with a "buyers market" and everything to do with the lack of planning permission.

MrChrisLondon

The gym is no longer there but I was always assured they were building another floor of flats. Obviously this might not be the case in the unlikely case they don't get planning permission they would have to do something else with the space.

I just want to know how badly this would affect the value. Maybe worth doing my own survey ?

eddddy

Pixie5740 wrote: »

It's a bit harsh to call the surveyor lazy when it's the developer who hasn't secured the necessary planning permission yet. I wonder why the developer has not been able to sell 6 flats and is knocking £100k off the price. I doubt it has anything to do with a "buyers market" and everything to do with the lack of planning permission.

I'm wondering if you've misread the post (or if I'm misreading your post!!!)

I'd assume the flat the OP wants to buy has planning consent!!! The comments about planning consent refer to a disused boxing gym on the 2nd floor of the building.

The OP isn't calling the surveyor lazy - the OP is worried that if another 'hypothetical' surveyor values the flat, that 'hypothetical' surveyor might be lazy (and not notice the disused gym on the 2nd floor).

Pixie5740

eddddy wrote: »

I'm wondering if you've misread the post (or if I'm misreading your post!!!)

I'd assume the flat the OP wants to buy has planning consent!!! The comments about planning consent refer to a disused boxing gym on the 2nd floor of the building.

The OP isn't calling the surveyor lazy - the OP is worried that if another 'hypothetical' surveyor values the flat, that 'hypothetical' surveyor might be lazy (and not notice the disused gym on the 2nd floor).

No I'm not misreading the OP. I too assume the flat he wants to buy has the necessary planning permission. However, there are parts of the building for which the developer is still awaiting planning permission and what's there currently will put many/all mortgage lenders off. If the developer was serious they would sort that out before trying to sell the flats rather than claiming the surveyor has done a bad job when it's them who hasn't crossed the t's and dotted the i's.

silvercar

In your opening post, you say it is a new build flat. Is the gym also new build or are the flats sitting on top of an old building?

Hoploz

I guess this is why they haven't managed to sell any of the flats yet

Cakeguts

The flats at the moment probably haven't sold because everyone has the same problem getting a mortgage. Nothing to do with the buyer's market. It is was you would have found something similar that didn't have this problem.

davidmcn

eddddy wrote: »

BUT... the gym is probably planning class "D2 Assemblies and Leisure" - so it can change into any of the following without needing any planning consent:

• Cinemas,
• Music and concert halls,
• bingo and dance halls (but not night clubs),
• swimming baths,
• skating rinks,

I suspect there'd be practical difficulties in turning a boxing gym into any of those things (and the people on the first floor might have something to say about a swimming pool!), but a gym is a "bad" enough neighbour as it is (potential for impact noise, music, people coming and going at all hours), so I would expect a significantly adverse effect on marketability of flats in the same building.