BTL mortgage issue - less than 50% in block private let

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    BTL mortgage issue - less than 50% in block private let

    Hi, I had decided to sell a BTL flat and we were due to exchange imminently, however today the buyer has pulled out. It was being bought by another BTL investor. The reason given is that the BTL mortgage company they were using has said (after the survey) that they are not prepared to lend on the property because the block it's in is majority social housing ( through a housing association). He has been told that most mortgage companies are now refusing to lend unless there is a 50% private let vs social housing ratio or above. Is this a common issue?
    I've only had one problem mortgaging previously which was with Platform as they wouldn't lend on ex-council properties - even though it hasn't been council owned for 40years.

    So a couple of questions please:
    Is it now the case that I'm going to struggle to sell to an investor or find a mortgage myself on this property?
    It's in a small block of 18 flats, only two are privately owned. It's a really good investment property with huge room, so this is really frustrating .


    #2
    Talk to a couple of specialist (BTL) mortgage brokers and see what the suggest.
    I am legally unqualified: If you need to rely on advice check it with a suitable authority - eg a solicitor specialising in landlord/tenant law...

    Comment


      #3
      Mortgage Companies work on the basis of risk, they may change their criteria accordingly to reduce their exposure. There's usually a premium on properties when sold to BTL investors as apposed to owner occupiers, as they see the yield with the owner see's it as their home.

      If the property is currently mortgaged, you most likely will not have an issue re-mortgaging with the existing company when the fix term ends. If you want to sell it, then you may need to drop the price and target the owner occupier segment.

      Comment


        #4
        Many people who bought ex-local authority properties, especially flats in blocks, are finding all kinds of problems with a wide range of issues. Sorry you're in this position.

        Comment


          #5
          I regret to advise that lenders irrespective of whether the property is a flat or house and ex local authority / housing association will not lend unless the majority of units are in private ownership and require a greater percentage of such property than the percentage quoted.
          sadly the reason is that not everyone likes to buy property where a significant number of occupants are housing association/ local authority tenants and the perceived view that there is a high probability of such persons not respecting property or indeed other occupants and therefore as a lender accept that in all probability such property would be very difficult to sell in the unfortunate event of default. Perhaps viewed as unfair by liberal minder people but as already mentioned every property is assessed on Suitability grounds and the considered view of market demand.

          Comment


            #6
            I have just done a quick check on a specific mortgage search tool and my previous post is confirmed however where the criteria doesn’t mention a percentage there is complete reliance on the valuers comments, suggest you try Foundation Home Loans or the Chorley Bldg Society, they seem to have a fair assessment criteria but remember you too might have difficulty in selling at some future date.

            Comment


              #7
              I can now advise that Zephyr Home Loans will entertain such situations where a minimum of 50% are in Private Ownership , hope this helps.

              Comment

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