Barclays deemed 4th floor flat close to Central London to have no sustainable resale potential

1st_time_london_buyer

user1977 said:

1st_time_london_buyer said:

As long as the property's valuation accurately considers its fourth-floor location without a lift, what's the issue? 

The issue is that lenders are averse to properties which have features which may make them more difficult to sell quickly, so they have criteria which deem properties unsuitable from their point of view. Those can be a bit clunky, but things which make a block "multistorey" or "too high to not have a lift" are often among them.

Admittedly this can get a bit chicken-and-egg ("this would be difficult to sell because buyers would have trouble getting a mortgage..."), but it's something you're going to have to run with.

I'm still struggling to understand. I've noticed that a three-bedroom property in a different block within the same development, also on the fourth floor without a lift, sold in 2015 for £110,000 more than the amount I'm offering for this two-bedroom property. Even considering the extra value of a small bedroom in London, let's say an additional £50,000, I would still be paying £60,000 less than the 2015 prices for a three-bedroom property!

Furthermore, all the top-floor properties sold in this development in recent years went for more, often considerably more, than my offered amount. While the property I'm interested in requires some cosmetic work and will need a new bathroom and kitchen in a few years, these aspects are reflected in the price. Could this be the reason?

I've commissioned a Level 2 Home Buyer Survey. Let's wait for their assessment; there might be issues with the property that I haven't identified.

hazyjo

As explained, you don't know what the lending criteria was in 2015 or previous years. If that criteria has changed with most lenders, you may understand why properties in the block are now worth significantly less.

Same with flats over shops. More of a problem with lenders now than they once were. Hence, hard to sell/mortgage.

user1977

1st_time_london_buyer said:

user1977 said:

1st_time_london_buyer said:

As long as the property's valuation accurately considers its fourth-floor location without a lift, what's the issue? 

The issue is that lenders are averse to properties which have features which may make them more difficult to sell quickly, so they have criteria which deem properties unsuitable from their point of view. Those can be a bit clunky, but things which make a block "multistorey" or "too high to not have a lift" are often among them.

Admittedly this can get a bit chicken-and-egg ("this would be difficult to sell because buyers would have trouble getting a mortgage..."), but it's something you're going to have to run with.

I'm still struggling to understand. I've noticed that a three-bedroom property in a different block within the same development, also on the fourth floor without a lift, sold in 2015 for £110,000 more than the amount I'm offering for this two-bedroom property. Even considering the extra value of a small bedroom in London, let's say an additional £50,000, I would still be paying £60,000 less than the 2015 prices for a three-bedroom property!

Furthermore, all the top-floor properties sold in this development in recent years went for more, often considerably more, than my offered amount. While the property I'm interested in requires some cosmetic work and will need a new bathroom and kitchen in a few years, these aspects are reflected in the price. Could this be the reason?

I think you're still missing the point. If the lender has as a criterion that they don't lend on any 4th floor flats, then yours is going to be rejected, no matter the value, condition, neighbourhood, or sales history in the block.

Residential mortgages are primarily a high volume, low margin business - the banks want quick, simple answers, not to have to spend time thinking about things too deeply. So they decide what types of property are risky, and just stay clear.

housebuyer143

1st_time_london_buyer said:

user1977 said:

1st_time_london_buyer said:

As long as the property's valuation accurately considers its fourth-floor location without a lift, what's the issue? 

The issue is that lenders are averse to properties which have features which may make them more difficult to sell quickly, so they have criteria which deem properties unsuitable from their point of view. Those can be a bit clunky, but things which make a block "multistorey" or "too high to not have a lift" are often among them.

Admittedly this can get a bit chicken-and-egg ("this would be difficult to sell because buyers would have trouble getting a mortgage..."), but it's something you're going to have to run with.

I'm still struggling to understand. I've noticed that a three-bedroom property in a different block within the same development, also on the fourth floor without a lift, sold in 2015 for £110,000 more than the amount I'm offering for this two-bedroom property. Even considering the extra value of a small bedroom in London, let's say an additional £50,000, I would still be paying £60,000 less than the 2015 prices for a three-bedroom property!

Furthermore, all the top-floor properties sold in this development in recent years went for more, often considerably more, than my offered amount. While the property I'm interested in requires some cosmetic work and will need a new bathroom and kitchen in a few years, these aspects are reflected in the price. Could this be the reason?

I've commissioned a Level 2 Home Buyer Survey. Let's wait for their assessment; there might be issues with the property that I haven't identified.

As others have said, you don't have to understand it just as a bank doesn't have to lend on property they don't want to. 
It probably is ridiculous because they will sell it in central London but they don't want to take them on, so they just have a blanket policy of not lending on them.

It's no different to them not wanting to take on people with adverse credit, properties that are unusual construction etc. The policy doesn't have to make sense. They publish what they will accept and what they don't and you only apply if you meet that criteria, if you don't you need to find a lender who feels as you do, that no lift is fine. It's not unmortgable as you have pointed out, its just not to Barclays taste.

Jonboy_1984

1st_time_london_buyer said:

user1977 said:

1st_time_london_buyer said:

As long as the property's valuation accurately considers its fourth-floor location without a lift, what's the issue? 

The issue is that lenders are averse to properties which have features which may make them more difficult to sell quickly, so they have criteria which deem properties unsuitable from their point of view. Those can be a bit clunky, but things which make a block "multistorey" or "too high to not have a lift" are often among them.

Admittedly this can get a bit chicken-and-egg ("this would be difficult to sell because buyers would have trouble getting a mortgage..."), but it's something you're going to have to run with.

I'm still struggling to understand. I've noticed that a three-bedroom property in a different block within the same development, also on the fourth floor without a lift, sold in 2015 for £110,000 more than the amount I'm offering for this two-bedroom property. Even considering the extra value of a small bedroom in London, let's say an additional £50,000, I would still be paying £60,000 less than the 2015 prices for a three-bedroom property!

Furthermore, all the top-floor properties sold in this development in recent years went for more, often considerably more, than my offered amount. While the property I'm interested in requires some cosmetic work and will need a new bathroom and kitchen in a few years, these aspects are reflected in the price. Could this be the reason?

I've commissioned a Level 2 Home Buyer Survey. Let's wait for their assessment; there might be issues with the property that I haven't identified.

You could spend the £3 at land registry and see if there is mortgage charge held over the other property, which might give you a good idea of a different lender to approach (although lenders apparently do sometimes limit their exposure over any particular development, and then won’t offer a mortgage if they already lend on xx% of the properties already….just in case anything structural or in the local environment devalues the whole development).

Alderbank

Emily_Joy said:

DullGreyGuy said:

My personal favourite was the time we had a knock on the door, answered it and there was a guy panting away from the climb. After he finally got his breath back he asked if we'd ever considered getting a conservatory? We said yes instantly and he said the Designer would be calling to draw up some plans... he never did

Perhaps he meant a balcony?...

Like this?

GDB2222

1st_time_london_buyer said:

I'm presently exploring another lender, but I find myself at the mercy of the valuer's judgment now.

As long as the property's valuation accurately considers its fourth-floor location without a lift, what's the issue? Many young, first-time buyers would gladly consider it as a stepping stone onto the property ladder. Later in life, they can opt for a more suburban setting with a garden, and sell it to another set of young first-time buyers working in the city.

Considering the current housing challenges in London and the difficulty in buying your first property, excluding these types of properties from the reach of young individuals seeking a mortgage should be considered a disservice.

If the property is difficult to mortgage, that is in itself going to reduce the value. At the very best, you're likely to be paying a higher interest rate, if you can't get a mainstream mortgage, and that significantly reduces valuation. 

So, I'd be a bit circumspect about diligently searching out a mortgage, unless you are quite sure the price takes all that into account.  

Alderbank

The 2022/2023 changes in fire safety regulations for properties over 11m high might have made lenders more cautious.

newsgroupmonkey_

You're going to be at the mercy of most non-standard mortgage lenders apparently.
Folk like Barclays, Santander, NatWest and so on won't entertain anything over 4 storeys.

You do have the advantage of being in a prime London area, so someone like Fleet might be interested. As Kingstreet said, it's probably best to go to a mortgage broker who has experience. You'll sadly not be able to get the best rates.

1st_time_london_buyer

Unfortunately, Leeds Building Society, like Barclays, declined to provide a mortgage for the property. Consequently, I've decided to withdraw from the purchase.

If only I had been aware of this problem. Lesson learned, I suppose. I incurred expenses on solicitors' fees and a level 2 building survey that confirmed the building and property were in good shape.

This property, once again, seems destined for the hands of a well-off foreign investor with the ability to make a cash purchase, eventually transforming it into a rental for individuals facing challenges, much like myself, in stepping onto the property ladder.