Advice re mortgage for an ex local authority high rise flat

bigtired24

My friends son works in London as a trainee tax accountant for Deloitte. He earns £30k per year and his salary will only go one way and thats up.

He wants to buy an ex local authority high rise flat (13th floor) in SE16 (Bermondsey). The asking price is £140k and he has a £40k deposit. He is being told that it would be difficult to get a mortgage and that the rate would not be competitive. Could anyone advise me if this is true and if so why, and more importantly any advice as to best lender to go to.

Thanks

silvercar

It is true.

Not many lenders will do this, so not many people will be able to buy it; lenders worry that, in the event of repossession, it would be difficult to off-load.

Also, there is a risk that you could get landed with a massive bill, if the council decided to refurbish the block. If the council spent £1m refurbishing a block of 100 flats, every privately owned flat would be charged £10,000. The maintenance could also be high.

Money4uMortgages

I agree with the above. A trick that sometimes pans out is to call one or more of the large chain of surveyors to see which lenders have lent previously on the property, or a similar property in the building. You may want to start with Colleys, as they do work for a number of different mortgage lenders. Let me know how you get on.

chappers

I'm sure that things have changed but highrise flats have always been difficult. 10-12 years ago I tried to buy a flat I was renting it was a seperate flat on the roof of a 9 storey block and it was ridiculously cheap.I later found out why. I spoke to every broker and every mortgage company I could and no one would touch it ,at any cost. Even those companies that mortgaged these sort of properties wouldn't . They all said it was because it was above the 8th floor , whatever bearing that had on it .

Conrad

Here are the lenders that might consider high rise 9I have'nt time to check this fully);

Norwich & Peterborough
DB (may have stopped though)
Accord
Coventry
SALT
IF
IPSWICH
LAMBETH (might have been taken over??)
London Scottish
Preferred mortgages
Skipton
Blemain
Bank of Scotland (pay brokers low commission - so u might go direct)
Barclays
RBS
Yorkshire Bank

Again I cant call them all to check this, use this as a rough starter

herbiesjp

There will be lenders who will agree this, but it will depend on the circumstances as a whole.

A lot of the time the lenders will say that it depends on the surveyors comments relating to re-sale values and demand for the property, along with the local area

Also, is it a concrete build?

chappers

herbiesjp wrote: »

Also, is it a concrete build?

I don't like where this is going.

herbiesjp

Why not ?

silvercar

You have to bear in mind that, if you have problems sourcing a mortgage, so will any buyer when you come to sell. This severely limits the price that can be obtained.

Dins

herbiesjp wrote: »

Also, is it a concrete build?

Bringing up an old topic.

Would it be easier to obtain a mortgage for a concrete build?

holly_hobby

In my own professional experience high risk blocks are difficult were near impossible outside of London.

Alliance & Leciester used to consider in London only, up to 15 floors - all flats in the block must be owner occupied (which is to do with block insurance and the maintenance of the property).

The Lambeth BS also considered such business in the London area.

I am currently not involved in the active placement of mortgages, so not sure who else is in the market - but a call to Santander may be a starting point just to sound them out.

Also a local mge broker, who I would guess with the nature of London and the numerous privately owned high rise blocks, will have arranged or come across a fair few of the same ilk. The added complication is the ex-council - with such property not considered as attractive or "saleable" as a traditionally privately built property. Although London is different for obvious reasons of supply and demand.

Hopefully an active London mge adviser who is on the forum will come along and be able to give more assistance ...

Hope this helps ..

Holly