Barclays lending criteria warning

Kobegodt

This is a tip to potentially save wasting time with application with lenders, Barclays in particular, by checking their lending criteria upfront. 

According to feedback received from Barclays mortgage advisor, they use an independent surveyor to indicate suitability of property to lend on. 

Having wasted several weeks of time and cost going through the affordability and product process we were informed that the property we have an offer on is not considered suitable for lending by the independent surveyor. - (nothing to do with valuation or LTV)

There is apparently no process to challenge or review this in Barclays. 

The context is a flat above commercial property in centre of Edinburgh - hardly a risky investment - and likely to apply to a great deal of properties in many towns and cities. 

So, regardless of our own situation, I’d advise at start of process to enquire if there are any potential arbitrary processes which may derail application.   

I’d stress this is NOT about affordability as  we were told they would happily lend to us but not, it seems, for any flat above commercial property in Edinburgh 🤷‍♂️ 

BarelySentientAI

Kobegodt said:

This is a tip to potentially save wasting time with application with lenders, Barclays in particular, by checking their lending criteria upfront. 

According to feedback received from Barclays mortgage advisor, they use an independent surveyor to indicate suitability of property to lend on. 

Having wasted several weeks of time and cost going through the affordability and product process we were informed that the property we have an offer on is not considered suitable for lending by the independent surveyor. - (nothing to do with valuation or LTV)

There is apparently no process to challenge or review this in Barclays. 

The context is a flat above commercial property in centre of Edinburgh - hardly a risky investment - and likely to apply to a great deal of properties in many towns and cities. 

So, regardless of our own situation, I’d advise at start of process to enquire if there are any potential arbitrary processes which may derail application.   

I’d stress this is NOT about affordability as  we were told they would happily lend to us but not, it seems, for any flat above commercial property in Edinburgh 🤷‍♂️ 

Often the case for flats above commercial properties - and not just this lender. Well documented in available information, and known to most brokers.

Did you go direct to Barclays (in which case you should have researched their criteria) or through a broker (who should have caught that for you)?

kingstreet

For pretty much every lender, acceptance of a property on/around commercial for mortgage security purposes is going to be down to valuer's comments. From Barclays intermediary criteria page on property;-

Some properties may have certain features which mean that extra care will have to be taken. In these cases please contact the Intermediary Support Team for further details on our lending policy:

• Contaminated land – typically from previous industrial use of the site
• Adjoining flats (granny annexe) – each case will be looked at individually
• Japanese Knotweed – please see separate policy section
• Agricultural restrictions – our policy position will depend on the extent of the restrictions
• Modern methods of construction – will require an individual assessment by a valuer
• Easiform cavity walled concrete – properties built before 1965, those with visible cracks or where adjoining properties are deteriorating will be declined
• Flats over shops/commercial premises – each case will be looked at individually
• High-rise blocks of flats/ Deck Access - Properties with deck area access can only be considered for good quality developments with no restriction whatsoever on mortgageability/saleability. Properties that have non-decorative timber cladding will be looked at individually.
• Mixed-use properties – please see 'Mixed-Use policy' page
• Section 106 properties- each case will be looked at individually depending on section 106 requirements. Please refer to S.106 agreement (S.75 in Scotland)
• Early steel frame construction – not normally considered suitable security but may be looked at by a surveyor if a Structural Engineer’s Report is obtained. Please contact the Intermediary Support Team for extra information

The above lists are not exhaustive. Please contact the Intermediary Support Team for further details.

Hoenir

Kobegodt said:

The context is a flat above commercial property in centre of Edinburgh - hardly a risky investment - and likely to apply to a great deal of properties in many towns and cities. 

Lenders don't advance money for investments. Their concern is the suitability of the property as security for the debt. This includes the speed of any recovery. Should the need arise. 

housebuyer143

Did you go through a broker who could have checked the suitability before doing the application? Flats above commercial are an issue with most mainstream lenders, and it's always down to valuer comments 

Kobegodt

Thanks all.  

It was direct request to Barclays and therefore perhaps I should feedback to them that they should review their workflow to include a earlier assessment/evaluation of property circumstances before wasting their and applicants time going through all the identity and financial checks/process.

Tbf to Barclays advisor all of that criteria in the intermediary guide was covered at the outset of conversation and apart from our time their own staff have spent considerable hours on calls and presumably processing. 

Investment was perhaps wrong choice of word rather than security although presumably Barclays do make money from lending. 

In this case it still seems peculiar risk profiling in a desirable area where there are hundreds of properties (many with sale histories in last years).