BTL for flat about restuarant

JNLondon123

Does anyone know mortgage lenders that will give BTL mortgages for flats above restaurants? My situation is - I have a flat that is in central London, respectable area, 15 mins walk from the Thames and does well in the rental market. I have it rented out on a consent to let right now. But three mortgage lenders have turned me down solely on the surveyor saying that it was above a restaurant. There's no issues with finance or anything else and I am looking for 60% loan. I tried Natwest and Birmingham Midshires then realised I needed to go to a specialist. I applied through my mortgage advisor for Zephyr who specifically do Flat Above Commercial mortgages. My mortgage advisor made it really clear that it was above a restaurant but the survey still came back saying it was above a restaurant and Zephyr turned it down! Zephyr admitted they made a mistake and refunded the survey cost.
The restaurant entrance is on a completely separate street to my flat entrance.

I am baffled, is everyone else that owns flats above restaurants in London having this problem?

K_S

@jnlondon123 London high street, already let, has a mortgage on it, 60% LTV. I would be very surprised if that wasn't mortgageable at mainstream rates simply because it was above a restaurant. I recently did similar LTB remos in SE18 and E11 for clients at 70-75% LTV.

Mind you, no 2 of these kind of properties are the same and it'll always be subject to valuer comments, but was that the only reason given by the NatWest and BM valuers? 

What is your broker suggesting as a next step?

JNLondon123

@K_S All three  mortgage companies gave the same reason. The surveyor said it was above a restaurant therefore was high risk. NatWest account manager even said that they had other BTL mortgages in the block but couldn't go against the survey comments.

Honestly it's a good enough flat, over 650 square feet, high ceilings, good condition, gated apartment complex, little communal garden area. 

Unlucky for me the same survey guy turned up for both Natwest and BM but for Zephry it was a different company and it was turned down because it was above a restaurant. Baffling. My mortgage advisor doesn't have next steps.

It's not above a chicken cottage either -it's a nice restaurant.

K_S

@jnlondon123 Well all I can suggest is getting a second opinion. It's just a matter of doing the legwork, shortlisting a few lenders, running it past their surveyors prior to placing it. Based on the limited info in your post, it's hard to accept that you won't have options simply because of the flat being above a restaurant.

JNLondon123

Thanks @K_S I've paid for three separate surveys so I'm despairing slightly. I'll try to  call around. What I'd really love to hear is of someone in a similar situation to me that got a BTL mortgage in this past 6 months. 

It's this one rightmove: property 106571774 if you are curious! 

K_S

@JNLondon123 Well that's the thing, there's no black and white answer to whether or not a flat above restaurant will be accepted by XYZ lender as it's always down to specifics and the subjective judgement of the individual surveyor.

I've done two recently. Flat above takeaway in SE18 with BM and above restaurant in E11 with Vida. NatWest used to be good with flat above commercial for resi but not for BTL recently.

Is it the Korean restaurant? Perhaps there's something specific about that type of outlet that valuers don't like.

I hope you find a suitable lender, good luck!

JNLondon123

Hi @K_S It is the Korean restaurant. Japanese Korean fusion. It is a restaurant not a takeaway though. It might be that. I guess I'll just keep trying! 

Thanks

user1977

Plus two other takeaways/restaurants 2/3 doors in one direction, and a cafe next door the other way. Might just be too high a concentration of "bad" neighbours? Just guessing though.

JNLondon123

@user1977 it might be the combination also. I just don't know how it didn't come up at all when I was buying the place. Banks were happily lending on it. I didn't get my own survey done I bought it 2014 so maybe the difference is also they are extra cautious right now.

dimbo61

Things have changed and solicitors and lenders are now having to do due diligence much more carefully.
Leases, ground rent, management charges, covenants, planning restrictions, and leasehold properties over shops and restaurants.
Time to find a Whole of market broker and pay them to find a suitable lender.
The fees are tax deductible