Mortgage company for overage clause

wedge69

Long story short, had a mortgage agreed with HSBC only to find out that the house has an overage clause attached (50% uplift on planning) at which point HSBC declined the mortgage. 

Lenders don't seem to say at the outset on their website whether they will lend or not on properties with an overage. 

Before engaging a mortgage advisor, does anyone here know of any providers that will lend under these conditions? 

Thanks! 

Thrugelmir

You'll find that mainstream lenders generally aren't interested in lending if onerous overage clause applies. Has the clause been added by the current owner?

wedge69

I think it was added three owners ago

0mse0

I would also love to hear of any mortgage providers (mainstream or otherwise) who have lent successfully on property with an overage. All suggestions most welcome!

OJ32

Our house had an overage clause inserted on part of the garden when we bought it a couple of years ago (ie it was a newly created overage not an old existing one). We got our mortgage from Handelsbanken who were quite flexible about the whole thing.

The risk is that although you might find a lender now, it is impossible to say if you or a future buyer will find a mortgage company willing to lend against a property with an overage on it later. 

As such I had our property title split in to two 1) the house and half the garden on a clean title and 2) the back half of the garden with the overage on it. That way i would always be able to sell or mortgage the clean title. I wouldn't buy a house without being able to hold the overage land on a separate title and would want the unencumbered portion to be sufficiently large to mean that it holds most of the value I was buying 

wedge69

Just to follow up on this - we had to pull out of this as we just could not get a mortgage. As mentioned above, even if we could, future buyers may not be able to. 

K_S

There are a handful of lenders who will consider lending on properties with an Overage clause. Some will only give a mortgage on the lower value (without the land) but will still consider lending. I have placed such cases (just two to my memory) with Darlington and Atom in the past, but this is not too recent and required a bit of to and fro before they could confirm that they will consider.

It's almost always on a case by case basis with the sight of wording needed to be run past the lender during the research phase so they can give an indication.

@wedge69 Out of professional interest, do you know if your broker tried any smaller lenders at all?

wedge69

I don't know the answer to that I am afraid. I know they found someone who 'may' consider it but the interest rate was three times as much. 
The wording on the deeds was too restrictive so in the end we took the advice of our solicitor and pulled out, but not before we had spent £££ on surveys unfortunately. 

K_S

@wedge69 It certainly looks like you dodged a bullet there! Good luck for your property search.