Is buying a flat above a shop worth it in a good location?

TinyDragon1990

My partner and I are looking to buy a flat in London on a limited budget. We're currently considering a property above a shop, very close to an overground station in a popular area in zone 3. Does anyone have recent experience with getting a mortgage under these circumstances? I understand that mainstream lenders tend to avoid flats above shops, but I'm not clear on whether it would still be a problem for a good location in London. We wouldn't want to have to go with a specialist provider who'd charge higher rates, or run the risk of it losing value if our buyers couldn't get a mortgage in future. 

The flat has its own entrance and you can't hear the road/shop from inside, if that makes any difference. The shop is currently a café, but I know that could easily change. 

Many thanks to anyone who can help!

eddddy

Maybe try talking to a few local mortgage brokers in that specific area. They might have arranged (or tried to arrange) mortgages for 'locals' buying similar flats in that same road or similar roads.


It's hard to predict how lenders' policies and attitudes will change in future years - and therefore whether this property will become harder to mortgage.

(I know somebody who has a mortgage with Halifax on a flat above a pub, they got that mortgage many years ago with no problem. When they tried to sell recently, no mainstream lenders - including Halifax - would offer the buyer a mortgage.)

hazyjo

Wouldn't buy it. They're often bought to rent out. As above, they're hard to mortgage now, and who knows what will change in the future.

If it's a cafe, it's prob A3 use. How would you feel with pizza delivery bikes, an Indian, or chicken shop below if the cafe closes?

Fire risk would also concern me greatly.

PS  deliveries are often extremely noisy too.

JReacher1

Always been a no for me to live above a shop, mainly because you don't know what it will end up being there in the future.  When you are in the flat can you smell anything from the cafe below? Would not like to live somewhere you can smell the grease from the downstairs cafe!

eddddy

JReacher1 said:

Would not like to live somewhere you can smell the grease from the downstairs cafe!

But on the other hand - every property has its price.

For example, a 'nice' 2 bed flat in that part of London might cost, say, £375k. But this 2 bed flat might only cost £325k because it's above a cafe.

Some people still might not touch it, but others might be happy to put up with cafe smells and noise if it gets them a size of flat they couldn't normally afford.

user1977

Lots of stuff which wouldn't be mortgageable elsewhere seems to be more acceptable in London - not sure if you'd have to go to a "specialist" lender as such but I expect you'd still be excluding some of the mainstream ones if it's already a "bad neighbour" use downstairs.

Might be better to ask on the Mortgages board where the brokers hang out.

canaldumidi

Years ago I lived in a rented flat above a KFC (before the name got shortened to that). It stank. And the rear access involved picking your way across the fat lining the yard.....

On the plus side, we got free chicken.....

Would I buy? No way!

clive0510

I wouldn't buy something like that to live there. I would buy it to let out and let some one else live there. 

SuseOrm

I look to the flat above a shop for 70,000 when your average two bedroom house was selling for 170 that’s the kind of discount I would want before even entertaining the idea.  I would’ve only gone for a for it had i been able to pay cash and I was a little bit short and in retrospect I’m glad we didn’t.  

TinyDragon1990

eddddy said:

Maybe try talking to a few local mortgage brokers in that specific area. They might have arranged (or tried to arrange) mortgages for 'locals' buying similar flats in that same road or similar roads.


It's hard to predict how lenders' policies and attitudes will change in future years - and therefore whether this property will become harder to mortgage.

(I know somebody who has a mortgage with Halifax on a flat above a pub, they got that mortgage many years ago with no problem. When they tried to sell recently, no mainstream lenders - including Halifax - would offer the buyer a mortgage.)

That's a good idea, thank you! I guess lender attitudes could vary even by location in London. 

diystarter7

Good that you have considered the sue of shop could change as many don't

Have you considered riots and the looting and burning of shops? If you have, then good but
if not, it's something I'd consider.

A friend of mine lived in Greenwich, a flat above a shop they were on the 5th floor
and this bloke got shot by the police (this is years ago) shops were looted but thankfully not
firebombed but were in other areas. Looters were trying to break into the building that had double glass doors but residents stood their ground.



Personally, I'd avoid a flat over a shop