Old house but ‘new build’

fatcatonamat

Hi all,
Wondering if you can give an insight. 

In the process of purchasing a semi detached bungalow. It has had been refurbished to add an extra two rooms in the loft space. The kitchen and bathroom is also recently done up. Electricity, plumbing etc - all is in working condition. 

We are going through a personally appointed mortgage broker and the Estate Agent’s recommended solicitor. 

Mortgage broker confirmed with Halifax that we are eligible for a mortgage. Let’s say this was £200k as an example. Lender (Halifax) sent their valuer to the property and after the valuation, lender is only willing to offer a lower amount for mortgage (example: only £180k instead of previous amount £200k). This is because the valuer claims the house is a new build. Mortgage broker escalated this to the top people in Halifax, only to be told the same.

We mentioned this to our solicitor, and she said that this is not true. She is adamant that this property is not a new build and that if we went through lenders directly, she will be able to get us a mortgage offer. 

Two things :
1. Is a solicitor truly able to get the full mortgage that the mortgage broker cannot?
2. Is there a way to go around this ‘new build’ definition, because the property is not a new build- just has renovation work done. 

Thanks a lot!

DullGreyGuy

fatcatonamat said:
Is there a way to go around this ‘new build’ definition, because the property is not a new build- just has renovation work done. 

Newly fully expanded/renovated properties typically come with a notable premium in the same way new builds do which is typically significantly lost during the first ownership as when you sell it on it won't have everything brand new anymore. Whilst no a mortgage expert I can see why they may down value it for consideration of what the asset would be worth if they had to seize it and resell it because you dont keep up with your mortgage payments

fatcatonamat

Thanks.

is there a lender out there that would be willing to offer the full mortgage? Is the solicitor right?

theartfullodger

Talk to a couple of mortgage brokers, see what they suggest 

Brie

Is there a new build near by?  MiL had the same problem when she was selling her flat.  One potential buyer had a mortgage valuer come round to assess the property and reported it was in a very poor state for a new build and so the bank refused any mortgage at all.  The problem was the new build flats were next door and MiL lived in a renovated Victorian vicarage.  The bank refused to correct the report and continued to insist that it was a new build simply based on the post code.  

TheJP

Brie said:

Is there a new build near by?  MiL had the same problem when she was selling her flat.  One potential buyer had a mortgage valuer come round to assess the property and reported it was in a very poor state for a new build and so the bank refused any mortgage at all.  The problem was the new build flats were next door and MiL lived in a renovated Victorian vicarage.  The bank refused to correct the report and continued to insist that it was a new build simply based on the post code.  

Dont think thats the issue here, the survey stated that the house had been extended and a total renovation which they class as a new build.

fatcatonamat

TheJP said:

Brie said:

Is there a new build near by?  MiL had the same problem when she was selling her flat.  One potential buyer had a mortgage valuer come round to assess the property and reported it was in a very poor state for a new build and so the bank refused any mortgage at all.  The problem was the new build flats were next door and MiL lived in a renovated Victorian vicarage.  The bank refused to correct the report and continued to insist that it was a new build simply based on the post code.  

Dont think thats the issue here, the survey stated that the house had been extended and a total renovation which they class as a new build.

Yes.
I see two options to move forward. And please correct me if I’m wrong:
1. Ask broker to look for another lender
or
2. Ditch the broker and go with the solicitor who grantees they can get a full mortgage.

what would you do?

kingstreet

Here's the Halifax definition of a newbuild;-

An initial occupancy/new build property is classed as any property being occupied and/or sold for the first time on the open market in its current state and includes converted and refurbished properties. These will fall into one of the following categories:

• Newly built property.
• Refurbished property i.e. refurbishment of an existing residential property, typically a re-furbished property will be considered as initial occupancy where the vendor is a builder/developer and the property has been vacated to allow for the refurbishment to be undertaken.
• Newly converted property i.e. conversion of an existing non residential property, e.g. an existing mill converted into flats.
• A property, either new or converted (as above), that has been tenanted and is now offered for sale by the builder/developer.

Many lenders have similar criteria. Any decent mortgage broker would be aware of this and avoid such lenders.

TheJP

fatcatonamat said:

TheJP said:

Brie said:

Is there a new build near by?  MiL had the same problem when she was selling her flat.  One potential buyer had a mortgage valuer come round to assess the property and reported it was in a very poor state for a new build and so the bank refused any mortgage at all.  The problem was the new build flats were next door and MiL lived in a renovated Victorian vicarage.  The bank refused to correct the report and continued to insist that it was a new build simply based on the post code.  

Dont think thats the issue here, the survey stated that the house had been extended and a total renovation which they class as a new build.

Yes.
I see two options to move forward. And please correct me if I’m wrong:
1. Ask broker to look for another lender
or
2. Ditch the broker and go with the solicitor who grantees they can get a full mortgage.

what would you do?

I would go for both and see which one wins!

fatcatonamat

Thanks. 

Going to do this 

fatcatonamat

Update:
1. The mortgage broker is unable to find another lender.
2. The solicitor called Halifax on our behalf, as a new application, and Halifax's mortgage protection team said that they cannot offer mortgage until the title of the property is split and registered for 6 months.

Even if we wait for 6 months, hypothetically speaking, does that mean Halifax (or another lender) will approve the mortgage valuation.