My buyer's mortgage refused due to service charge on flat

Simba_the_Lion

Hi everyone.

I am trying to sell my flat. My buyer has just had his mortgage refused because of the service charge on the flat, approx £2200pa.

The first mortgage was refused in September because of the cladding on the building. There is very little, it's a small block of 10 flats. We spent 4k on an EWS1 survey which we passed with a B1 rating. That took over 3 months months. It looked like everything was back on. He had to reapply for his mortgage and this has happened. There is a fragile chain ahead of me which I don't think will hold much longer. My buyer is hopping mad, he really wants to buy this flat. He has already made a complaint to the lender (Legal & General I think). I am devastated. I have to move. The estate agent's mortgage advisor is going to complain to the lender tomorrow. It's unbelieveable after passing the EWS1 survey and the money spent, this has been going on since July.

Any advice very welcome. Thanks!

ACG

EWS is not the problem. 
Save the complaint, it will literally do nothing bar waste the brokers time. Your buyer needs to concentrate on finding a new lender. 

Simba_the_Lion

ACG said:

EWS is not the problem. 
Save the complaint, it will literally do nothing bar waste the brokers time. Your buyer needs to concentrate on finding a new lender. 

Thanks you could be right. My estate agent told me he is already thinking about going to a new lender. But I don;t think the forward chain will hold. It's already been nearly 7 months.

Getting the EWS1 was a relief though.

[Deleted User]

What are you getting for £2200pa?   Is there anything to justify that level of service charge?  I've done plenty for more than that that have gone through and ive had plenty for around that figure that have been declined.  

Simba_the_Lion

Deleted_User said:

What are you getting for £2200pa?   Is there anything to justify that level of service charge?  I've done plenty for more than that that have gone through and ive had plenty for around that figure that have been declined.  

We don't really get a lot. General maintenance, balconies gardens etc maintained, but we've no lift and not much in the way of grounds. It's high but not very high I think.

[Deleted User]

Understandable that it would be declined by certain surveyors. For that price you'd generally start to see private gyms or concierge or underground parking being available as a few examples
Hopefully a new lender will take a different view.  
Some have background criteria that limits service charge to a certain % of purchase price and others just go on surveyor's gut feeling about how easy it is to remarket and sell on future. 

Simba_the_Lion

Deleted_User said:

Understandable that it would be declined by certain surveyors. For that price you'd generally start to see private gyms or concierge or underground parking being available as a few examples
Hopefully a new lender will take a different view.  
Some have background criteria that limits service charge to a certain % of purchase price and others just go on surveyor's gut feeling about how easy it is to remarket and sell on future. 

Thank you that's interesting to know. I don't know what the reason is but I may find out. Even if another lender approves it may be too late, the onward chain will have broken and I'll be back to square one, or nearly.

ACG

If you are struggling to sell, it might be worht just proceeding with the sale. Their offer would usually be valid for 6 months so you could potentially drag it out whilst you find somewhere new. 

If it has been 7 months, I am surprised the chain is still in place.I would have given up by now being completely honest. 

Simba_the_Lion

ACG said:

If you are struggling to sell, it might be worht just proceeding with the sale. Their offer would usually be valid for 6 months so you could potentially drag it out whilst you find somewhere new. 

If it has been 7 months, I am surprised the chain is still in place.I would have given up by now being completely honest. 

I'm surprised the chain has held for 7 months. My buyer has been with me since last March. I'll stick with my buyer if he can get another mortgage offer. That means I'll be buying at this year's prices and selling at last year's, but it my be worth it just to get the sale of this flat to go through.

[Deleted User]

The block near me charges that and you get a swimming pool!