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

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!


  • JReacher1JReacher1 Forumite
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    Eighth Anniversary 1,000 Posts Name Dropper I've been Money Tipped!
    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!
  • edited 5 July at 6:21PM
    eddddyeddddy Forumite
    13.8K Posts
    Part of the Furniture 10,000 Posts Name Dropper
    edited 5 July at 6:21PM

    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.

  • edited 5 July at 6:37PM
    user1977user1977 Forumite
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    edited 5 July at 6:37PM
    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.
  • canaldumidicanaldumidi Forumite
    3.5K Posts
    Tenth Anniversary 1,000 Posts Name Dropper Combo Breaker
    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!
  • clive0510clive0510 Forumite
    728 Posts
    500 Posts Second Anniversary
    I wouldn't buy something like that to live there. I would buy it to let out and let some one else live there. 
  • SuseOrmSuseOrm Forumite
    365 Posts
    100 Posts Name Dropper
    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.  
  • TinyDragon1990TinyDragon1990 Forumite
    6 Posts
    First Post
    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. 
  • diystarter7diystarter7 Forumite
    1.3K Posts
    1,000 Posts Name Dropper
    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
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