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

Exodi

diystarter7 said:

Incredible. If you really believe that then I'm sorry, but I give up.
<>
We will agree to disagree as I'm more than certain I am right

Hahahaha, I can't even tell if you're trolling the forum with your snarky attitude+replies. Not one single person agrees with you, but I guess everyone is wrong.

You admit you have personal experience of this which is quite clearly blinkering your perspective, but it's no reason to be rude. The top five results from a quick google of 'why don't lenders mortgage properties above shops':

1. thisismoney - David Hollingworth, a broker at London and Country Mortgages, replies: Flats above commercial property have always posed difficulties and limited mortgage choices. 

The reason for this all stems from concerns that the property will be harder to sell than property in a wholly residential area

2. onlinemortgageadvisor - Lenders consider flats above shops and other commercial premises to be a riskier prospect than other types of residential property for several reasons. Perhaps the most important is that commercial businesses have the potential to cause a nuisance such as noise, smells or being open at unsociable hours, all of which could affect their resale value.

Statistically, these properties tend to lose value faster under certain market conditions, so lenders will be keen to protect their investment, for example by asking for larger deposits, or in some cases by refusing to touch them at all.

3. onlinemoneyadvisor - Lenders consider homes near commercial properties more difficult to sell, because:

• They can be less pleasing to look at than conventional residential properties
• There may be issues with noise from deliveries, customers, or business activities
• There may be issues with the smell of food or garbage

4. specialistmortgageonline - lenders may be concerned that a takeaway will cause late night noise, anti-social behaviour, increased litter and of course cooking smells. A lender may take the view that these factors could have a negative impact on the area and therefore limit its appeal to future buyers.

5. huutimoney - The main reason why it may be much harder to get a mortgage for a flat above a shop is that many mortgage lenders may be worried about the resale value of the property. The fact that you are happy to buy it doesn’t mean there will be a lot of buyers in the market when you come to sell it.

Also, I'd wager more houses have had cars driven through the wall, than firebombing by looters of adjacent properties, yet you still see mortgages on houses on roads.

But I've been on this forum long enough to know what your response to this will be. Hence my original reply.

dekaspace1

I see someone mentioned noise, over the years I have lived above bars 3 times one was, just across the road from another bar (In a single lane street) in town centres.

The 1st bar I stayed above was verrrry noisy whenever they had karaoke nights but I'd say it was one of my 2 favourite places I ever lived as it was cheap rent, a good room (if outdated) and in a very good location never had a single problem there from public.

The 2nd one I stayed above was a nightmare but that was because I had one large bar right behind me which did their glass emptying at closing time, and i'd be woken early by the empties being collected, and I had 2 more bars below me and it was common for the regulars to stand in the doorway and empty their bladders, thefts were common as no buzzer entry so things would get dumped on the doorstep.

Whilst a cafe is different it also is part of a town centre so has the usual sort of things, it all depends on where it is exactly in town, i,e I know of flats and HMO's that are above normal 9-5 shops that were quiet.

Also I stayed in a hotel once that had about 6 take aways around it and shared a back alley, I was kept awake to about 3am (as that was when the take aways closed) as that was where the motorbikes for delivery drivers were parked and my room was at the back of building.

anon_ymous

diystarter7 said:

We will agree to disagree as I'm more than certain I am right

Have a nice day.

Lol. Sounds like you're having a bit of a hissy fit after others gave you better reasons as to why they won't provide a mortgage 

I'm buying a house not that far from protected land. Pretty sure no mortgage provider is going to refuse me a mortgage because some feral cows might destroy the property, if they get loose 

elsien

I can probably rummage out a lot more examples of flats above shops that haven’t been firebombed and looted as opposed to ones that have, if that helps at all? 

If diystarter is referring to the 2011 riots, aside from being 11 years ago the looters appeared to have been targeting department stores and luxury items rather than cafes from the summaries after the event.

Slithery

elsien said:

I can probably rummage out a lot more examples of flats above shops that haven’t been firebombed and looted as opposed to ones that have, if that helps at all? 

If diystarter is referring to the 2011 riots, aside from being 11 years ago the looters appeared to have been targeting department stores and luxury items rather than cafes from the summaries after the event.

Indeed.
Also it's more likely that a lender will approve a mortgage for a flat in London then they will for a flat anywhere else in the country - they wouldn't touch a flat above a cafe in my little village that's very unlikely to ever see a riot. Why do you think that is the case @diystarter7?

Section62

Slithery said:

elsien said:

I can probably rummage out a lot more examples of flats above shops that haven’t been firebombed and looted as opposed to ones that have, if that helps at all? 

If diystarter is referring to the 2011 riots, aside from being 11 years ago the looters appeared to have been targeting department stores and luxury items rather than cafes from the summaries after the event.

Indeed.
Also it's more likely that a lender will approve a mortgage for a flat in London then they will for a flat anywhere else in the country - they wouldn't touch a flat above a cafe in my little village that's very unlikely to ever see a riot. Why do you think that is the case @diystarter7?

Could it be the risk of a herd of cows taking direct action against the cafe for stealing their milk for cream teas?  (Cows being well known for their barbarity and propensity for violence in villages up and down the country)

Slithery

Good point.
The craft shop next door that sells hand-knitted jumpers also needs to watch out...

Ath_Wat

diystarter7 said:

user1977 said:

diystarter7 said:

user1977 said:

diystarter7 said:

Exodi said:

diystarter7 said:

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

Well that escalated quickly.

OP is above a cafe, so unless the looters have a penchant for tea bags, I 

Why on earth do you think most lenders avoid lending out on property above shops, lol.

Because of nothing to do with the risk of them being fire-bombed in a riot. Even in inner city London, what proportion of commercial premises do you think that's ever happened to?

The reason they don't lend is because of more mundane disturbance and loss of amenity caused by noise, smells, etc, and the tendency of commercial occupiers not to want to contribute towards common charges.

Where is the evidence? I can supply the evidence of shops being looted/smashed/robbed/fire-bombed etc etc., therefore, resulting in a much less saleable and in turn a bigger risk. A risk many established lenders will not entertain. 

Quiet frankly the reason you give does not add up as lenders are there to make money so why write of millions of possible loans amounting to tens of billions, lol.

It's the same rationale as for other types of properties which don't meet lenders' lending criteria. They want properties which are of a predictable value and will be easily marketable if they have to sell. The reasons buyers don't like flats above shops are similar to the reasons they don't want to live across the road from a pub. It's nothing to do with them fearing a riot in their street.

We will agree to disagree as I'm more than certain I am right

Are you familiar with the concept of "evidence"?

Take a court.  They don't just have everyone troop in and tell a story, then the judge says "We'll just have to agree to disagree".

Science is the same.  Not every unsubstantiated proposal has to be given equal weight.  Nobody "agrees to disagree" except on subjects where there can be no evidence because they are not matters of fact, but of opinion.

You shouldn't be "certain you are right" in the first place without being able to articulate reasons more compelling than "it once happened to a  friend of a friend", and when shown categoric evidence that you are wrong, you need to look at that evidence and acknowledge the fact, not necessarily publicly, but at least to yourself.

You might find that if you start doing that you start believing fewer obviously ridiculous things.

TimothyRS

Definitely worth buying!

If it's a corner shop or something similar and in London you won't have any problems with lenders and it's a great opportunity to get a property at a slight discount

I used Santander for years and used to live above a corner shop, no issues at all getting the best rates

In fact living above a shop has its benefits as you don't have noisy neighbours once they close in the evening, and it provides extra security during the day as someone is always around. 

It's only noise bars or restaurants you want to avoid.

SDLT_Geek

TimothyRS said:

Definitely worth buying!

If it's a corner shop or something similar and in London you won't have any problems with lenders and it's a great opportunity to get a property at a slight discount

I used Santander for years and used to live above a corner shop, no issues at all getting the best rates

In fact living above a shop has its benefits as you don't have noisy neighbours once they close in the evening, and it provides extra security during the day as someone is always around. 

It's only noise bars or restaurants you want to avoid.

Seeing this old thread resurrected, brought back the most horrible memories of diystarter!!!!!  I am kind of expecting them to resurrect under a different user name.