Can’t Finance New Build Flat!

GDB2222

user1977 said:

Tiglet2 said:

user1977 said:

silvercar said:

The solicitor should have warned him of the risks of exchanging without a mortgage offer. If he didn’t then the solicitor may have some liability here.

Although any mortgage offer back in 2020 would have expired long before now - it's the (presumed) lack of a longstop which is more of an issue.

OP said longstop was 31st October

Oops, missed that. In which case, would be interesting to know what advice they got about having a longstop 3 years away.

The op said exchange was last year.

AaronS95

It’s Springwell Gardens in Leeds. The long stop date is 31st October which it’s touch and go whether they’ll make currently as he’s been given an estimated completion date also of 31st October…

Does he wait and hope that they don’t complete or does he try to get out of it (minus his deposit) 

Seems like most of the flats were sold to investors with specialist lenders and/or big deposits 

MultiFuelBurner

https://citylife.uk.net/springwell-gardens-construction/

eddddy

AaronS95 said:

Does he wait and hope that they don’t complete or does he try to get out of it (minus his deposit) 

You need to re-read the replies in this thread. If he fails to complete, he could lose much more than his deposit.

deannagone

Why is it blacklisted by lenders?  Has this been verified?  Don't seem to have an answer on this and it is a very important question.

eddddy

deannagone said:

Why is it blacklisted by lenders?  Has this been verified?  Don't seem to have an answer on this and it is a very important question.

Googling around a bit - the flats are frequently referred to as "investments" for BTL. So lenders might not regard them as suitable for residential mortgages.


As a general comment for others looking at property "investments" (and not referring to this development, as I know nothing about it)...

Property "investments" are sometimes sold by super-aggressive, high-pressure salespeople, because they'll earn sky-high commission. (Like a real-life version of the film "The Wolf of Wall Street").

So, for example, it's possible that a naïve ftb could be 'suckered' into signing a contract for an unsuitable property by a salesperson who is focussed on their commission.

AaronS95

Thank you for replies! We are not sure why the mortgage lenders don’t like it - they won’t tell him and are stating ‘confidential reasons’ as to why. 

It was the developers who suggested he’d need a specialist lender 

kingstreet

I suspect the issue is limited demand for owner-occupied residential property in what appears to be a wholly commercial/industrial sector.

Jal2e

Springwell Gardens has been blacklisted by most mortgage lenders as it has been built using MMC (Modern methods of construction) and has not been BOPAS certified. 

eddddy

Jal2e said:

Springwell Gardens has been blacklisted by most mortgage lenders as it has been built using MMC (Modern methods of construction) and has not been BOPAS certified. 

If that's correct, the developers would have know that at the outset - and therefore would have known about potential issues with mortgageability.

So the OP needs to look back through documents (and recall conversations) to see if there is any evidence of misrepresentation about mortgageability. i.e. was the OP told (or was it implied to the OP) that they'd be able to get a 'standard' mortgage?


If this was a "business to consumer" transaction, the OP would have even more protection, and more scope for getting their money back.

But the advertising suggests the development is targeted at BTL investors, so the developers might argue it was a "business to business" transaction, with less protection.


But if the OP told the developer that they were buying for "owner occupation" - so essentially a consumer - the developer should have either treated it as a "business to consumer" transaction (with consumer protection), or told the OP that they can't sell to them, because they don't sell to consumers.


(Unless the OP claimed to be a business buyer.)