LTV on ex-council properties - why so low??

caroleh79

Looking on some advice please from anyone who has information on re-mortgages and ex-council properties (not sure if this just an issue in Scotland.) We are looking to remortgage at the moment and raise some extra capital, however have been told that the LTV for ex-council is 70% max.... Currently we only have mortgage of just less than 70% of value and would like to increase to about 75%.

Can anyone firstly answer why thi sis the case with ex-council properties?? (guy I spoke to at GE didn't have a clue...)

Secondly, has anyone else come across any lenders who can lend up to 80% on this type of property.

herbiesjp

Is that statement about LTV from your current lender?

Are you still in your pre-emption period? Did you buy directly from the council, or was it already owned privately when you bought it?

There are lenders that could offer 80% LTV as long as your income will support the mortgage amount

Dan_Collins_2

Is it a flat or house, if its a flat and you have adverse it could be an issue.

History tells us that if prices drop, they drop hardest and hardest! Houses are not so bad.

Its silly really, but everybody wants to live in house made of plasterboard these days!

caroleh79

Current lender was 70% max LTV on this type of property when we purchased 2 years ago, however we (naively perhaps) thought it was just them. Fixed rate with them ends 30 June, hence looking around now.

As far as I know, the property has been owned privately for some years before we purchased in 2006. It is a flat (although 4 in a block and not a high-rise).

Income is not a problem as joint is probably around the £50K mark.

Dan_Collins_2

TO be honest, it must be you as well as the flat. Halifax and a few others would lend on it as long as you fit the bill. The lender and other of that type have got even less flexible in the last 6 months!

dunstonh

Can anyone firstly answer why thi sis the case with ex-council properties?? (guy I spoke to at GE didn't have a clue...)

Some lenders are a bit wary of council properties as there can be a bit of a stigma attached to them which can impact on resale values. When I used to do mortgages, there were whole council estates that couldnt get mainstream lenders due to the type of construction. In the boom years many of these issues vanished but now property is falling in value and lending is tightened there are some lenders again more wary of lending on higher risk properties.

caroleh79

dunstonh wrote: »

Some lenders are a bit wary of council properties as there can be a bit of a stigma attached to them which can impact on resale values. When I used to do mortgages, there were whole council estates that couldnt get mainstream lenders due to the type of construction. In the boom years many of these issues vanished but now property is falling in value and lending is tightened there are some lenders again more wary of lending on higher risk properties.

Isn't that frustrating..... in the area I live I don't actually think that there are any of the properties that are still council owned and it is such a lovely area - not the image that council estate conjours up at all!!!

dunstonh

caroleh79 wrote: »

Isn't that frustrating..... in the area I live I don't actually think that there are any of the properties that are still council owned and it is such a lovely area - not the image that council estate conjours up at all!!!

Problem is that some minion sitting at a desk in another location has made a decision that all ex local authority properties should be treated the same way. Often because they got stung in the past. Banks are weird beasts. They tend to get carried away during the good times and crawl under a shell and hide during bad times. Only occasionally do you find any level headed sensible period. At the moment they are under that shell

Gailk

Our house is an ex council house, sounds similar to yours in that most of them are now privately owned. When we bought, a few years ago it was through Yorkshire BS who went to 95%. We've just remortgaged to Nationwide with a LTV of 80%. The house has been privately owned since the mid 80's and we have a good credit rating.

herbiesjp

caroleh79 wrote: »

Current lender was 70% max LTV on this type of property when we purchased 2 years ago, however we (naively perhaps) thought it was just them. Fixed rate with them ends 30 June, hence looking around now.

As far as I know, the property has been owned privately for some years before we purchased in 2006. It is a flat (although 4 in a block and not a high-rise).

Income is not a problem as joint is probably around the £50K mark.

Sounds like most of the high street lenders would be able to help then

going2die_rich

Ex-Council Houses are looked down on by many buyers for the simple reason, they believe they have more of the common rift raft living in them / around them. So if buyers look down at them, that means it's more difficult to sell which tends to mean it demands a lower price than the same sort of property in a non-council street/area. So the banks probably factoring that in so reducing what they will lend to you in LTV terms, so that if they do need to reposess it and sell it on, they can knock off whats needed and still cover their loan&costs.