Section 157 restriction

RMNWales

Hello, I know this issue has been discussed in other posts but we are really struggling to secure a mortgage to buy a house - it is an ex local authority house with section 157 restriction. We tried hsbc and was a definate no. We asked a mortgage broker that said that halifax and the leeds would consider. However both have said no as there is no cause saying that if the house was re possessed the house cannot be sold on open market (that is without s157 which is local connection) after 24 weeks. Anybody here been able to secure mortgage recently to buy a house with S157?? 

RMNWales

Sorry no clause ( not cause - typo) thank you

K_S

@rmnwales I have done the rare mortgage for an S157 property (almost all in Devon if I remember correctly). There are only a handful of lenders that will consider but I can't recall having had the issue cited by yourself.

Generally, these kind of restrictions are drafted in a manner that allows people to take out a mortgage with the right lender, otherwise it would simply not work.

It might be worth -
- digging into recent sales of similar houses to see if they were bought with a mortgage
- speaking to a couple of local building societies or local mortgage brokers who are familiar with the restriction. Swansea BS used to be good at considering such cases, might be worth speaking to them.

Good luck, I hope it works out in the end! For the benefit of others who may come across the thread, please do feedback as to what happened if you can.

RMNWales

Thank you. We have looked at recent sales and HSBC provided a mortgage on a s157 last year despite saying no to us after the survey identified that there was a s157 restriction attatched. We didnt know this was an issue before then. We can only imagine that it was not picked up by HSBC for the other mortgage that was approved. Also Halifax provided mortgages on S157 in other areas. But have said that they will not approve without a letter from LA saying that they can sell on open market if not received an offer in 24 weeks ( if repossessed). Have looked at other mortgage terms and conditions- Nationwide, Leeds for example and they all have similar wording. Just doesnt make sense!! Will try Swansea BS thank you.