Mortgage tips - owning over 25% of a building

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    Mortgage tips - owning over 25% of a building


    I currently own a flat in a converted building. There are 4 flats in total.
    I'm buying one of the other flats in the block.

    However it seems it's tricky to get a mortgage when you own over 25% of a building. I have found one through a broker, but the rates aren't great.

    Anyone else had this? Any tips for lenders that don't have this rule?


    You are indeed correct , lenders do have an aversion to owning a higher percentage of individual units within a block, its possible but your broker will need to put time aside to source lenders. I am presuming the lender which has agreed in principle has a name which starts with an S and finishes with K , if I am wrong let's play guess the lender.


      Thanks for the reply.
      You're wrong, so knock yourself out...


        What makes you want to buy a second flat in the same building when the mortgage lenders think it is risky for them ?


          Why is it any more risky? That's a genuine question.
          Although the main reasoning has been because this property comes with a share of the freehold.



            Tomorrow I will go through my sourcing system and see if I can give you a helping hand but as a First Time BtL applicant I think it may prove a real challenge.


              Thank you.
              Though it's a second BtL, if that makes a difference. The first is said existing flat.


                Do you own another property. In addition to your current BtL


                  Yes. House where I live. One existing BtL. This would be my second BtL (in same block as the first).


                    Thanks I will do my best during tomorrow


                      Hi profjosh

                      As promised in my last posting I have done my research.

                      The following is subject to status , value of the property and the application of relevant income / applied rental stress calculations.

                      I have established and indeed spoken with seven lenders with whom I enjoy excellent relationships with to determine attitude relevant to your situation.

                      Three lenders indicated that they would categorically refuse to consider any proposition where the applicant would have an exposure greater than 25% of the number of units in the property , having said that the following lenders will entertain an application . BM Solutions, Aldermore Mortgages , Kent Reliance and Precise mortgages.

                      Interest Rates vary:-

                      BM Solutions 2.24% upwards to circa 3.04%
                      Aldermore Mortgages 2.98% to 4.78%
                      Kent Reliance 3.54% to 4.99%
                      Precise Mortgages 3.26 to circa £3.99

                      Each lender has its own reversionary rate the most expensive being Kent Reliance , having said that they currently offer a product switch at the end of the initial incentive period , but this cannot be guaranteed going forward. Completion Fees might seem a bit chunky but if you are intent on buying , beggars cant be chooses.

                      I hope the above is adequate for you and if I were you either find another broker as clearly the current one doesn't know his BtL market or simply didn't care once the case was declined. If you do however stick with them , I would suggest that you tell them that you have done independent research and whilst you might be prepared to pay a nominal fee you wont pay their normal fees as clearly they haven't justified their fee.


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