Property "unmortgageable" due to maintenance

[Deleted User]

I am currently trying to get on the property ladder and for my first house I've always wanted a doer upper, something I could do a bit of work on and add value to. Also for the area I'm trying to buy in something fully modernised wouldn't really be in my price range.

So I found something that wasn't terrible (see pics) but would have needed a little TLC to get it looking perfect, work which I was more than willing to do.

A surveyor went to the property on Wednesday to do the valuation report but then refused to do a valuation and said the bank will not lend against it due to "POOR STATE OF REPAIR & MAINTENANCE OF THE FLAT"

I could understand them saying the property wasn't worth the asking price due to lack of maintenance (i believe this is called a down valuation) but to refuse to lend against it full stop seems so strange to me?

The feedback I have had from them thus far was just that the maintenance wasn't good there was no mention of any serious structural issues.

Plenty of people get mortgages for renovation projects which are in a much worse state than this....

Can anyone shed any light on why they have said this?

Thrugelmir

francescaf2704 wrote: »

Plenty of people get mortgages for renovation projects which are in a much worse state than this....

Is the surveyor referring just not to the flat but the building a whole. As a leaseholder a share of the overall building will be your liability as well.

PasturesNew

It could also be that if you buy it for £100k, spend £20k on it, make it worth possibly £140k ..... then there's a risk for them because once you've spent £100k if you strip it all out, then lose your job, it's only worth £75k at that point....

[Deleted User]

PasturesNew wrote: »

It could also be that if you buy it for £100k, spend £20k on it, make it worth possibly £140k ..... then there's a risk for them because once you've spent £100k if you strip it all out, then lose your job, it's only worth £75k at that point....

Hi yeah, totally get that! However, still don't see why they just didnt give a down valuation. Ie. "we would only recommend a purchase price of 80k vs current asking price of 100k" which would cover their backs in this instance.

Theres nothing too major needs doing just a new kitchen and a new bathroom eventually but both are liveable for the time being, all walls are plastered, all lighting works etc its more of a fixer upper rather than a full renovation job....

haras_nosirrah

which lender?

Natwest for example will either lend or not lend - they don't do partial retentions

other lenders will lend but with a retention until the work is done

it is also possible that as it is a flat and therefore you aren't fully responsible for maintenance that the lender won't do retentions at all

they wouldn't usually do downvaluations for work that needs doing because you could not do the work and then it would get worse and worse and the flat could end up worthless wheras with a retention they are saying that we are holding this money back until you get the work done

[Deleted User]

haras_nosirrah wrote: »

which lender?

Natwest for example will either lend or not lend - they don't do partial retentions

other lenders will lend but with a retention until the work is done

it is also possible that as it is a flat and therefore you aren't fully responsible for maintenance that the lender won't do retentions at all

they wouldn't usually do downvaluations for work that needs doing because you could not do the work and then it would get worse and worse and the flat could end up worthless wheras with a retention they are saying that we are holding this money back until you get the work done

Its Halifax!

haras_nosirrah

I have never had a Halifax retention (I mainly work with affordable housing so shared ownership and help to buy) - maybe one of the other brokers can clarify whether they do retentions on flats