Have I been mis sold my mortgage?

Tumbleturn

Newbie here so please bare with me...I bought a small property next to a care home and belonging to it that I was MD of in 2002 and got plans to extend it.  I got a 110k mortgage from Barclays to start the work in 2005 then in 2006 got my full mortgage of 300k.  At this time Barclays valued my completed property at 650k.  When I saw my Barclays mortgage advisor in 2005 he genuinely said I suppose you will be wanting an interest only mortgage as rates were high and looked like coming down he said. 

Anyway that isn't my reason for posting on here, late last year I applied to have a garage built at the side and the local planning officer asked me if I would be storing the care home property in it.  I questioned this, his response was my property had a planning application in 1987 for a change of use to staff accommodation and it stipulates the building can only be used in conjunction with the care home.  Unfortunately it turns out I was made aware of this when I bought the place but I genuinely forgot all about it!

My problem now is the 1st mortgage is due to be paid back in 3 months and I don't have the funds, worse still I cannot sell the property to anyone bar the care home (who are not interested).  I have just had an independent valuation last week which was 500k if it was a private dwelling and 300k as it stands with these planning restrictions.  So I can't sell it and neither can Barclays as it is.  I have been advised to apply for a LDC citing over 4 years usage as a private dwelling as I have lived in it for 18 years as a family home which I am on with.  It will take time and is not guaranteed by any means.

I totally realise I should have taken the planning condition into consideration when I applied for my mortgage but I had totally forgotten and that is genuine so I know I am to blame.   I am wondering should Barclays not have done a search on my house when they had it valued and were they negligent in getting a valuation and giving me an interest only mortgage on a property that can only be used in conjunction with the care home next door?  I have 3 months to find 110k and the only way I could pay that is to sell the property which I can't! 

BoGoF

I'm struggling to understand the first part. You were MD (managing director?) at the care home and you gained the planning permission?

If so, did you mention this to Barclays or your Solicitor? Having re-read it you didn't but 'forgetting' to mention a key point doesn't mean you are not to blame.

DE_612183

If the £110k mortgage ( interest free ) is now coming up to fruition - can you not just re-mortgage?

Tumbleturn

BoGoF said:

I'm struggling to understand the first part. You were MD (managing director?) at the care home and you gained the planning permission?

If so, did you mention this to Barclays or your Solicitor? Having re-read it you didn't but 'forgetting' to mention a key point doesn't mean you are not to blame.

Sorry if am not making sense.  I worked for the care home that owned the property and I bought it off the care home owner.   I have just realised I wasn't made aware of this planning issue, I was going to edit my post above but can't see how to.  I've found a letter from my solicitor who did the conveyancing for me and he sent me a list of planning permission numbers and applications for the care home and on the list is change of use for my house in 1987.  It should be noted in his letter he wrote that the only point to note was I had no permitted development rights, there was no mention of the building can only be used in conjunction with the care home.  I wanted to correct my original post to say it was only the change of use I was aware of! 

"We enclose copy of Local Search entries revealed. Some of these will relate to your property . Please let us know which ones you have. In the meantime we have asked *****'' '' to see if she can find any at her end.

 The only other points to note from the Search is that it is stated that "permitted development rights removed" This basically means that no alterations can be made to the property at all by way of even very small extensions without planning permission or building regulation approval whereas normally you can make small alterations by way of additions.

 When we have the paperwork we will let you know"

ACG

I dont see how Barclays are at fault. 
If anything it would be the solicitors. I cant work out if you were aware of the restriction or not as your 2 posts say opposites. 

user1977

I suppose the first question is whether you're comfortable that the planners' latest comments are in fact correct, or if they've maybe misinterpreted the previous consents?

I agree none of this is the bank's fault though, there's no principle that the bank is confirming to you that your title/planning etc is fine, that's for your solicitor to do.

chanz4

so you missbrought it?

amnblog

Barclays are interested in the property only is so far as is it suitable security for their loan. 

It is not the Lender's concern if it was a wise purchase in hindsight. If there are legal complications or restrictions that have been missed, that is a matter for the original Solicitor.

bluelad1927

chanz4 said:

so you missbrought it?

That only really works if you spell it correctly

Hoenir

Back in 2005 interest only mortgages accounted for the bulk of new mortgage lending. As a borrower you would have been aware that the capital would have to be repaid at the end of the mortgage term. In addition to which following the Mortgage Market Review in 2014 lenders were required to contact borrowers by letter to remind them of this fact. Lenders did so compliantly as not to leave themselves open to accusations of misselling or people attempting to make the problem the lenders at the end of the mortgage term.