Lender holding back full amount.

grayson

The buyer of my property has sent me their lenders valuation report. Never heared of the Lender. The asking price for the property is 195,000. However they will not release the funds until essential work has been completed. They have applied for a BTL mortgage. The house is fully functional if old fashioned fully working, electrics central heating kitchen and bathroom.
The essential work includes new bathroom, kitchen, central heating and wiring. 

Report states value of property before work 195,000. Estimated after work £215,000. Until the work is complete the lender will not release a penny. Even though the buyer is paying £50,000 deposit. I have spoken to my solicitor and they have never seen a report like it.

Any idea how we should progress? 

Thanks

dimbo61

Speak to your estate agents in the morning and  put the  property back on the market.
The buyer is not getting a mortgage from this lender.
They need a  development  loan to carry out the works needed to bring the property up to standard.
Now with all the rules and regs with a BTL property  this involves considerable  expense.
Mains wired smoke alarms,  EPC , GSC, EICR, etc

MikeJXE

dimbo61 said:

Speak to your estate agents in the morning and  put the  property back on the market.
The buyer is not getting a mortgage from this lender.
They need a  development  loan to carry out the works needed to bring the property up to standard.
Now with all the rules and regs with a BTL property  this involves considerable  expense.
Mains wired smoke alarms,  EPC , GSC, EICR, etc

Interesting!!! I thought I smelt a rat 

mi-key

That sounds a bit dodgy ! If it is worth £195K as it is and that is what the buyer is paying, then the lender should be lending on that basis not on what it may be worth at some point if work is done on it ?

So they are saying they want you to sell it for £195K and also do work to make it worth £215K that you won't get any benefit from ???

Are you sure it's not the buyer trying it on to try and get all that work done for free? 

cr1mson

MikeJXE said:

dimbo61 said:

Speak to your estate agents in the morning and  put the  property back on the market.
The buyer is not getting a mortgage from this lender.
They need a  development  loan to carry out the works needed to bring the property up to standard.
Now with all the rules and regs with a BTL property  this involves considerable  expense.
Mains wired smoke alarms,  EPC , GSC, EICR, etc

Interesting!!! I thought I smelt a rat 

I don't think it is a rat more that the property is not in a current state to be let therefore the lender is not willing to lend as the mortgage is specifically for buy to let so that is where the income is coming from to pay mortgage. If property unlettable no income!

However ultimately it does boil down to fact that they are unproceedable. 

housebuyer143

Basically to get a BTL mortgage the house must be in a immediate rentable condition. If it's not, then it will not meet the lending criteria and they need a refurb BTL mortgage which allows this. 
I imagine because it won't pass the EICR and maybe EPC requirements it therefore isn't rentable.

Nothing for you to do. They either get ab appropriate mortgage or you need to remarket. Give them a deadline because I imagine they won't be keen to pay the cost associated with a refurbishment mortgage.

housebuyer143

mi-key said:

That sounds a bit dodgy ! If it is worth £195K as it is and that is what the buyer is paying, then the lender should be lending on that basis not on what it may be worth at some point if work is done on it ?

So they are saying they want you to sell it for £195K and also do work to make it worth £215K that you won't get any benefit from ???

Are you sure it's not the buyer trying it on to try and get all that work done for free? 

Not dodgy. The buyer wants to refurbish the property on a BTL mortgage which is not allowed. Lender is basically refusing to lend by using this valuation. Normally you get this or a 0 valuation.

dimbo61

So the buyer should know this
Huge Red flag.
Back on the market 

user1977

grayson said:

Any idea how we should progress? 

How is your buyer suggesting they progress? As they appear to be telling you that they can't get a mortgage.

grayson

We didn't use estate agent just a Solicitor. Buyer wanted it as soon as he noticed vacant house. If I relist with an estate agent can I use my current solicitor? as majority of work with them has been done.

user1977

grayson said:

If I relist with an estate agent can I use my current solicitor?

It's entirely up to you which solicitor you use. They're your solicitor, not your estate agent's solicitor.