From residential to buy-to-let/let-to-buy – rejected at valuation??

innis

A bit of a long one - sorry.

I have a flat above the commercial premises. It was always above the commercial and next to the chip shop.

The first mortgage was with NatWest when I bought it 2014, no problem securing that, valuation ok. When my deal ended I remortgaged to RBS (after Nationwide rejected at valuation as above commercial and RBS took over from NatWest), valuation came back ok (a little less ££ than expected but ok), then after the deal ended I remortgaged to HSBC (with ok valuation).

Now I am looking to remortgage the flat to buy-to-let and have tenants in with consent to let already and my problems began.

I went to NatWest as I always assumed they were the most lenient of all lenders and here is the problem – they instructed valuation who came back as rejected stating that the property won’t be saleable. As reasons giving number of statements that aren’t true (like ‘access from the access road’ – there is no access road, it is a back yard with parking for the building; or that it's next to chip shop and OTHER food outlets on the parade that would be open at night - chippy was there when NatWest mortgaged it before and there are NO other food places in the parade just barbers, sweets shop and NOTHING is open after 8pm and no alcohol licenses either; and few other things that simply arent true). I’m especially surprised as NatWest had previously mortgage this flat and I had other lenders take it on too with no issue. The flat is in a very desirable location, 2bed over 700sqf with only one more flat in the building, parking, renovated kitchen and bathroom, top floor with loft access – so I don’t understand the valuation of not saleable! 

As my second option I have now gone directly to HSBC as the current mortgage is with them to switch it to buy-to-let and I was expecting to have a desktop valuation but was told most likely will be physical to assess the rental income (I have a signed contract for the place already not sure what’s the point). Now I’m worried that HSBC might use same valuator that NatWest did and I won’t get it accepted again… Is there really no lender who will mortgage the flat above commercial premises?? I’m desperate as currently I’m losing money due to having to pay full tax on rental income, and having to pay high mortgage payments as my 2 year deal has ended.

Any advice on valuators – can I pay for one myself? Any lenders that are more lenient? Is my mistake not being there during the valuation to sweet-talk them?

PS. I am contemplating to submit the complaint about the valuator (not expecting to go with NatWest anymore but more out of principle, to address the incorrect statements). Is there any point?

 

 

[Deleted User]

Just because someone mortgaged it in the past doesn't mean they have any desire to mortgage it again.  You are dealing with lenders criteria in 2021,  what happened in the past isn't relevant. 
You can in theory point out the errors in the valuation and ask if they will send another valuer out for a 2nd opinion but I could probably count the number if times this has happened on 1 hand. 
RBS and HSBC arent in the same group by the way. You are thinking of Natwest and RBS. 

There are lenders who will accept the rent being received for valuing purposes but not that many.  Most want to go in and assess what the current open market rent is.  This is partly to avoid someone inflating the rent for a period of time to make it easier to get a mortgage.  

Ultimately a high street lender will be assessing based on their ability to repossess and easily offload to the general market.  A large portion of that general market wont want to own a property above a chippy so lenders will be hesitant.    
You should have options but I'd suggest contacting a BTL broker who can put the case to lenders pre-valuation team prior to submitting an application

innis

Deleted_User said:

Just because someone mortgaged it in the past doesn't mean they have any desire to mortgage it again.  You are dealing with lenders criteria in 2021,  what happened in the past isn't relevant. 
You can in theory point out the errors in the valuation and ask if they will send another valuer out for a 2nd opinion but I could probably count the number if times this has happened on 1 hand. 
RBS and HSBC arent in the same group by the way. You are thinking of Natwest and RBS. 

There are lenders who will accept the rent being received for valuing purposes but not that many.  Most want to go in and assess what the current open market rent is.  This is partly to avoid someone inflating the rent for a period of time to make it easier to get a mortgage.  

Ultimately a high street lender will be assessing based on their ability to repossess and easily offload to the general market.  A large portion of that general market wont want to own a property above a chippy so lenders will be hesitant.    
You should have options but I'd suggest contacting a BTL broker who can put the case to lenders pre-valuation team prior to submitting an application

Thanks! The flat isn't above the chippy, it is in the next building..but I guess that doesn't really matter. 
Any knowledge on how HSBC are valuing in 2021? Am I looking at the same outcome with them in this case?