A complicated property!

KatieL767

I’m after some advice… I got a decision in principle from a lender (via a broker). However after the surveyor had been they have withdrawn this offer. 1) because it has an annex - sort of! The house was changed to allow the daughter to move in, but there is still only 1 front door and it’s not separate from the rest of the house. It just has 2 kitchens! There is also only 1 council tax bill for the house. 

The other reason it’s been declined is because it’s currently a small livery yard. The owners are retiring. I’m going to be using it for my own horses only. So not a business, which is how the lenders are viewing it (NatWest and nationwide have both refused a residential mortgage). Even though the advert doesn’t state that any business is included in the sale. It’s says perfect for those wanting a small holding! 

My broker has asked the lender to look at the advert for the property so they can see the layout of the house for themselves and also see that no business is included - but they flat out refused! Seems to be a tick box exercise. 

If there wasn’t a sign outside saying livery yard then the surveyor would probably have assumed the horses that are there belong to the sellers. 

I’ve now gone to a small local building society and I’m awaiting a survey from them. I’m hoping because it’s local and they are open to actually having a conversation that I might have more of a chance. If the surveyor (from an external company) comes back and says it’s commercial not residential can the building society override this decision? 

The solicitors have sent me some info across and I can see that the land and the house are on 2 separate deeds… will this make things easier for a mortgage or worse? 

Thanks for reading! 

user1977

The deeds aren't relevant. The lender can have their own opinion about things.

Are you going via your broker to the new lender? Really it's the broker who ought to be guiding you through lenders' criteria about this sort of thing.

MWT

KatieL767 said:

The other reason it’s been declined is because it’s currently a small livery yard. The owners are retiring. I’m going to be using it for my own horses only. So not a business, which is how the lenders are viewing it (NatWest and nationwide have both refused a residential mortgage). Even though the advert doesn’t state that any business is included in the sale. It’s says perfect for those wanting a small holding! 

The fact that it is a 'small holding' can be enough to deny a residential mortgage with a lot of lenders...

How many acres is included?

This comment in another recent thread may help...

https://forums.moneysavingexpert.com/discussion/comment/80038246/#Comment_80038246

KatieL767

user1977 said:

The deeds aren't relevant. The lender can have their own opinion about things.

Are you going via your broker to the new lender? Really it's the broker who ought to be guiding you through lenders' criteria about this sort of thing.

Yes it’s via a broker. But she’s never come across and issue like this before. The lender’s criteria we met both times. And she highlighted that there is not mention of a second kitchen being an issue in their criteria and asked them to review it based on this - but they refused. 

KatieL767

MWT said:

KatieL767 said:

The other reason it’s been declined is because it’s currently a small livery yard. The owners are retiring. I’m going to be using it for my own horses only. So not a business, which is how the lenders are viewing it (NatWest and nationwide have both refused a residential mortgage). Even though the advert doesn’t state that any business is included in the sale. It’s says perfect for those wanting a small holding! 

The fact that it is a 'small holding' can be enough to deny a residential mortgage with a lot of lenders...

How many acres is included?

This comment in another recent thread may help...

https://forums.moneysavingexpert.com/discussion/comment/80038246/#Comment_80038246

Thanks for the link I’ll give that a read. It’s just under 4 acres. 

K_S

@katiel767 Sorry to hear about the trouble you're having. Hopefully you haven't had to go through actual full applications with NatWest and Nationwide to learn that they won't lend? You did the right thing by going through a broker but hopefully they did the ground work before making a recommendation.

Ordinarily, for a property like this (large acreage, annex, two kitchens, etc.) what a broker does is first look at published criteria (it's unlikely to address all the aspects of the property)AND speak to a few lender BDMs, give them all the relevant details and ask for their feedback on whether or not it is likely to meet their criteria. There's never a guarantee (as it's always subject to a full valuation) but ideally, for a property like this, you should be recommending a lender only after they've given it an ok on principle.

Some lenders like Nationwide even offer a pre-valuation enquiry (https://www.nationwide-intermediary.co.uk/-/media/NFI/documents/db62-pre-valuation-property-form.pdf?la=en&hash=23CF797E9FA46598D3C03C9D458EA5F527337652) so you can get feedback from the valuer without submitting a full application.

Good luck, it sounds like a lovely property and I hope you're able to get a mortgage to buy it!

KatieL767 said:

I’m after some advice… I got a decision in principle from a lender (via a broker). However after the surveyor had been they have withdrawn this offer. 1) because it has an annex - sort of! The house was changed to allow the daughter to move in, but there is still only 1 front door and it’s not separate from the rest of the house. It just has 2 kitchens! There is also only 1 council tax bill for the house. 

The other reason it’s been declined is because it’s currently a small livery yard. The owners are retiring. I’m going to be using it for my own horses only. So not a business, which is how the lenders are viewing it (NatWest and nationwide have both refused a residential mortgage). Even though the advert doesn’t state that any business is included in the sale. It’s says perfect for those wanting a small holding! 

My broker has asked the lender to look at the advert for the property so they can see the layout of the house for themselves and also see that no business is included - but they flat out refused! Seems to be a tick box exercise. 

If there wasn’t a sign outside saying livery yard then the surveyor would probably have assumed the horses that are there belong to the sellers. 

I’ve now gone to a small local building society and I’m awaiting a survey from them. I’m hoping because it’s local and they are open to actually having a conversation that I might have more of a chance. If the surveyor (from an external company) comes back and says it’s commercial not residential can the building society override this decision? 

The solicitors have sent me some info across and I can see that the land and the house are on 2 separate deeds… will this make things easier for a mortgage or worse? 

Thanks for reading! 

Strummer22

@KatieL767 good luck with the purchase. My situation in the comment linked by MWT is not identical to yours as we are running a business. 

It's frustrating that 4 acres of land could preclude the property from getting a residential mortgage. I would guess the lenders you've tried just don't have the appetite for this property. However, if it's not precluded by their criteria I suppose you have nothing to lose by requesting to escalate the matter, or raising a formal complaint about how the matter has been handled - anyone else have an opinion on this?