Failed surveying because the flat is currently a HMO?

callum323 · 18 April 2017 at 5:21PM

So we have been working on applying for a mortgage on this ELA flat for almost a month now with Natwest. The current (or possibly previous) landlord had put up a wall in the middle of the living room and partitioned it into two bedrooms. And right now he has in total 4 separate tenants in an originally 2 bedroom flat. The survey report came back recently and it says that currently it's considered to be a HMO (House in multiple occupation) and therefore it's not a "suitable security". We applied for a residential mortgage and it will simply be a flat for the three of us to live in. We have no intention to lease out any of the rooms in the future! So we are absolutely gutted by the decision.

So our mortgage broker advised us to prepare some evidence to show that the flat will only be used for our own residential purposes and he has sent off two letters (one from the vendor detailing the current tenants have been notified and will be vacated before completion, another from us declaring that we won't be turning the flat into another HMO) to Natwest to appeal against the surveying decision.

Can anyone suggest if there's anything else I can do to assist the application?

Thanks!

AnotherJoe · 18 April 2017 at 5:28PM

Offer to accept an amount retained until the partition wall has been removed and lounge reinstated?

Thrugelmir · 18 April 2017 at 5:30PM

Get the current owners to reinstate the property to it's original layout.

callum323 · 18 April 2017 at 5:40PM

Thrugelmir, AnotherJoe:

Thanks for your replies! I am not sure how the vendor might respond to that as there are tenants living in there still until June and we are looking at completion roughly at that time unfortunately.

Do you think the fact that there are multiple tenants living in the flat is a bigger problem than the wall? Of course if the former is the main issue, we can try to convince the lender we will be the only occupants. If the latter is the problem then we might have to resort to asking the landlord to remove the wall?

AnotherJoe · 18 April 2017 at 9:09PM

The tenants need to be out before you exchange and you need to visit and ascertain that is the case.

That is exchange, not completion.

I wouldn't be that keen on them reinstating beforehand , who knows what mess they might make ? Unless you accept that a mess might need fixing but at least it's not structural. But if the LL is intending to have tenants up until near completion,I doubt they would spend the money anyway.

Thrugelmir · 18 April 2017 at 9:15PM

AnotherJoe wrote: »

I wouldn't be that keen on them reinstating beforehand , who knows what mess they might make ? Unless you accept that a mess might need fixing but at least it's not structural. But if the LL is intending to have tenants up until near completion,I doubt they would spend the money anyway.

Likewise you expect a lender to advance money on a what if scenario. Safe to assume the conversion isn't either authorised by the freeholder or Council compliant.

Failed surveying because the flat is currently a HMO?

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