Should I withdraw my offer?

Splodges

Hi

New here and first post in serious need of second opinion.

I'm 27 in the UK in the process of buying my first property.

The property is £110,000, it's a studio flat, to me it seemed fairly pricey but worth the value compared to other properties I'd been looking at. The flat was for sale at a fixed price, I loved it and wanted to put in an offer before someone else did.

The offer was accepted almost immediately, I've got an offer in principal and the lender(s) have agreed to lend to me subject to the survey.

I've had 2 surveys done (paid for by lenders), both have declined. The first said the decision was based on the size of the property. The second had more info:

"The property has been marked as unsuitable security, regarding which the valuer has provided the following comments:

“The property cannot be recommended as a suitable security for the society due to; - It's small size limiting marketability and other major high street lenders may not accept. - The means of escape in the event of fire are inadequate.”

My mortgage broker already has another lender he wants me to try next, I'm meeting with him in a couple of days. I feel as though because 2 of these well known lenders have already declined I may have trouble selling this property in the future. Is it normal to get declined twice in a row like this? Should I just take it as a red light and withdraw my offer? Should I communicate with the estate agent and say lenders won't lend at this price and see if I can negotiate price with the seller even though it was advertised as fixed?

A bit lost here

Mutton_Geoff

My first property was a studio flat in Putney. Cost £19,000 then which was an awful lot of money. I was so claustrophobic, I had to sell it within a year.


If you can find an area in budget, you can't go wrong with a two bed flat. This would also enable you to take in a lodger to help with the costs and you're less likely to need to move on in the near future.

chunkytfg

You have 2 mortgage companies telling you the property will be hard to see in the future and they don't think it is a sensible buy for you.

I would walk.

Remember unless you paid up front or on the issue of a valid mortgage offer the mortgage broker will just keep passing you round in the hope of getting paid. They wont especially care what you buy

Thrugelmir

Splodges wrote: »

The means of escape in the event of fire are inadequate.”

Suggest you investigate whether suitable modification is possible.

Flo_89

Splodges wrote: »

Hi

New here and first post in serious need of second opinion.

I'm 27 in the UK in the process of buying my first property.

The property is £110,000, it's a studio flat, to me it seemed fairly pricey but worth the value compared to other properties I'd been looking at. The flat was for sale at a fixed price, I loved it and wanted to put in an offer before someone else did.

The offer was accepted almost immediately, I've got an offer in principal and the lender(s) have agreed to lend to me subject to the survey.

I've had 2 surveys done (paid for by lenders), both have declined. The first said the decision was based on the size of the property. The second had more info:

"The property has been marked as unsuitable security, regarding which the valuer has provided the following comments:

“The property cannot be recommended as a suitable security for the society due to; - It's small size limiting marketability and other major high street lenders may not accept. - The means of escape in the event of fire are inadequate.”

My mortgage broker already has another lender he wants me to try next, I'm meeting with him in a couple of days. I feel as though because 2 of these well known lenders have already declined I may have trouble selling this property in the future. Is it normal to get declined twice in a row like this? Should I just take it as a red light and withdraw my offer? Should I communicate with the estate agent and say lenders won't lend at this price and see if I can negotiate price with the seller even though it was advertised as fixed?

A bit lost here

Sorry to hear that the two lenders have declined - I know it's difficult as this happened to me with the first property I wanted to purchase. I think take it as it's to safeguard you (and them) financially from making a loss.. it might be that this property is best suited to buyers who have the cash as opposed to needing a mortgage. I'd be inclined to withdraw and explore my options...

AdrianC

Splodges wrote: »

I've had 2 surveys done (paid for by lenders), both have declined. The first said the decision was based on the size of the property. The second had more info:

"The property has been marked as unsuitable security, regarding which the valuer has provided the following comments:

“The property cannot be recommended as a suitable security for the society due to; - It's small size limiting marketability and other major high street lenders may not accept. - The means of escape in the event of fire are inadequate.”

So two have knocked it back on size, one of whom added in the fire escape.

How big is it...?

And, yes, I'd be taking it as a hint.

Slinky

We had a small studio flat which my husband lived in during the week. There was no means of escape other than down the common area staircase, or climbing out through a second floor window and jumping. As would be the case with many blocks of flats. Size of the flat would have nothing to do with the fire risk. If there'd been a fire in his kitchen or lounge/bedroom he'd have gone down the stairs, if there had been a fire on the stairs he'd have had to be rescued via the window. His front door was a fire door. I think the common areas had sprinklers. Have the common areas in yours got a sprinkler system?


Is this flat purpose built or an adaptation of an older building?

LadyDee

Two mortgage lenders have declined to lend on the property - you might eventually find one who will give you a mortgage. A couple of years or so down the line and you need to move in a hurry - any prospective purchaser of yours could well face the same problem. Just accept that it's not easily mortgageable and walk away. There is always another property that is just right for you.

davidmcn

Studios are in general difficult to mortgage.

Do you think there is merit in the comments about the fire safety? What sort of building is it in? Presumably not a modern purpose-built one if it doesn't comply with current fire regs.

If you can point us towards it online we can probably give more educated answers.

SmashedAvacado

I would walk away

You won't be able to sell it easily and as such, its not worth what you have offered. It should probably be marketed only to cash buyers / the auction market.

Fire_Fox

Welcome to MSE.

IMO the negatives of a small studio flat outweigh the positives. Only one person can live there, even guests for more than one night can be awkward. This makes it more likely you will want to move on or sell up relatively quickly (£££).

Given the flat has poor fire safety you may well not be able to let it out if you circumstances change. You may have issues getting contents insurance (includes certain fixtures and fittings).

Leasehold means liability for buildings insurance and service charges. Having to seek the consent of the freeholder before renovations or improvements. Stricter Building Regulations to comply with compared to freehold houses. You may well not be able to do much more to 'personalise' this studio flat than you can to a flat you rent.

HTH.