Mortgage valuer states the property is "not suitable security".

Reaper495

Good afternoon all,

Seeking advice on the following situation.

As per the subject title, a mortgage valuer (used by Nationwide) states the property is "not suitable security" as it's "adjacent to a takeaway/commercial premises". There's a restaurant, a hair salon/supply store, a kebab, and a laundromat next to the property we are looking to purchase.

The property in question is a 1st-floor maisonette, completely renovated, 2-minute walk to the local London Underground train station, a desirable town in Hertfordshire, schools (public and private), under the peppercorn rent and lease has been extended for a total of 157 years. There's more to it but it's just a short summary.

Little bit confused as to why Nationwide's valuer had stated it's not suitable when Natwest's valuer stated it was fine (long story short, we were initially declined by Natwest for a mortgage. We've resolved a number of debt-related issues and our mortgage broker is reaching out to Natwest again to re-appeal). 

We are first-time buyers so we are both super confused with all of these new meanings/acronyms etc when it comes to purchasing a house. We have just over 50% deposit for the house so the mortgage amount isn't that much and the repayments are well within our budget.

Should we be worried about the above going forward when it comes to reselling the property or was this valuer just "not sure" of the area? The mortgage broker (who is based in the next town over) is aware of the area but not 100% familiar with it. This place is going to b a 5 year home but need to have some idea if this is worth our while or not.

Any form of guidance or support would be greatly appreciated and happy to provide more details if asked.

Thanks in advance.

kingstreet

What is directly underneath, on the ground floor? Did Countrywide do the valuation?

Sorry to say, this is not a case I would ever have put to Nationwide.

newsgroupmonkey_

It's fairly straightforward. The lender isn't prepared to lend on this particular property. It might be £1, might be £1m, but it's just not their thing.

Some lenders will not lend on certain types of property. For instance, non-standard construction, proximity to certain things (in this case, takeaway - could be a number of things, but a lot of lenders are nervous about proximity to hot food - extraction etc.)

This might need a specialist mortgage advisor.

K_S

@reaper945 It's unfortunate, but different lenders have different criteria when it comes to high-street flats above commercial. 

The valuer commissioned to do the valuation will judge the property differently based on the lender. This is an excerpt from the manual that Nationwide issues to valuers on how to assess flats (maisonettes also fall under flats) near commercial for a Nationwide mortgage. As you can see, there is a lot of subjectivity involved and there are plenty of reasons why they could judge the property to be unsuitable security for Nationwide.

Flats above commercial will always be more difficult to mortgage than a standard one, but for one that's close to an underground station you *should* be able to get a mainstream mortgage relatively easily. I rarely come across similar high-street above-commercial flats in London postcodes that couldn't be mortgaged at mainstream rates.

theartfullodger

Worth buying as a gamble, for cash.  Otherwise probably avoid...

lookstraightahead

You are asking them to lend you money.

if you asked two people on the street to lend you money, one might, and one might not. 

How do you know it's going to be 5 years? You might not be able to sell it in 5 years time.

I'm sure there was another thread similar to this before Christmas .

Reaper495

kingstreet said:

What is directly underneath, on the ground floor? Did Countrywide do the valuation?

Sorry to say, this is not a case I would ever have put to Nationwide.

So there’s a ground floor maisonette directly underneath and the same of the other side. If you look at the property, it’s essentially a big detached house, converted into 4 maisonettes.

As far as we’ve been informed, it was another real estate agent that carried out the valuation. 

Ah well, our mortgage broker found a good deal with Nationwide and everything was going until we got that “wonderful” piece of info.

Reaper495

newsgroupmonkey_ said:

It's fairly straightforward. The lender isn't prepared to lend on this particular property. It might be £1, might be £1m, but it's just not their thing.

Some lenders will not lend on certain types of property. For instance, non-standard construction, proximity to certain things (in this case, takeaway - could be a number of things, but a lot of lenders are nervous about proximity to hot food - extraction etc.)

This might need a specialist mortgage advisor.

Such a “odd” thing to be “nervous” about but what do I know, I’m a first time buyer lol.

Appreciate the comment none the less.

Reaper495

K_S said:

@reaper945 It's unfortunate, but different lenders have different criteria when it comes to high-street flats above commercial. 

The valuer commissioned to do the valuation will judge the property differently based on the lender. This is an excerpt from the manual that Nationwide issues to valuers on how to assess flats (maisonettes also fall under flats) near commercial for a Nationwide mortgage. As you can see, there is a lot of subjectivity involved and there are plenty of reasons why they could judge the property to be unsuitable security for Nationwide.

Flats above commercial will always be more difficult to mortgage than a standard one, but for one that's close to an underground station you *should* be able to get a mainstream mortgage relatively easily. I rarely come across similar high-street above-commercial flats in London postcodes that couldn't be mortgaged at mainstream rates.

Thank you very much for the very detailed reply and screenshot. 

So the property in question is a 1st floor maisonette and beneath it is a ground floor maisonette, so it’s not above the restaurant/business etc.

The train station mentioned in my initial post, time 2 mins on your phone/watch and you will reach the station. That’s how close it is.

The property is situated in a small town and the most “rowdy” part of it is the school run lol

Reaper495

theartfullodger said:

Worth buying as a gamble, for cash.  Otherwise probably avoid...

Yeah, we’re going through the notions of weather to go ahead with this place. 

I guess we will wait and see what NatWest have to say…

K_S

Reaper495 said:

K_S said:

@reaper945 It's unfortunate, but different lenders have different criteria when it comes to high-street flats above commercial. 

The valuer commissioned to do the valuation will judge the property differently based on the lender. This is an excerpt from the manual that Nationwide issues to valuers on how to assess flats (maisonettes also fall under flats) near commercial for a Nationwide mortgage. As you can see, there is a lot of subjectivity involved and there are plenty of reasons why they could judge the property to be unsuitable security for Nationwide.

Flats above commercial will always be more difficult to mortgage than a standard one, but for one that's close to an underground station you *should* be able to get a mainstream mortgage relatively easily. I rarely come across similar high-street above-commercial flats in London postcodes that couldn't be mortgaged at mainstream rates.

Thank you very much for the very detailed reply and screenshot. 

So the property in question is a 1st floor maisonette and beneath it is a ground floor maisonette, so it’s not above the restaurant/business etc.

The train station mentioned in my initial post, time 2 mins on your phone/watch and you will reach the station. That’s how close it is.

The property is situated in a small town and the most “rowdy” part of it is the school run lol

@reaper495 As Kingstreet mentioned, it's simply not a property that should have gone to Nationwide. Based on the description, it should be fairly easy to place even if NatWest don't reconsider. Hopefully the two application hard checks don't have too much of an impact in the near term. Good luck!