Mortgage for Apartment


T

Thomas

Hello

My son is trying to buy a fairly new apartment in the centre of Leeds - as a
buy to live-in not as a buy to let.
He has a decent deposit and had a good mortgage offer from Nationwide prior
to making his offer.

Nationwide are now going a little cool on the offer saying that they don't
usually offer mortgages on properties over 4 stories - my son's prospective
apartment is in a 10 story building.

Does anyone know what's going on here?
Are they worried about it being a buy to let - even though he's assured them
it's not.
Or are they worried about the long term solvency of the building - they want
to know the owner-occupancy level.

Can anyone recommend an alternative mortgage company who can offer
competitive rates (3% for 4 years) on newish apartments?

Thanks for any advice.
Thomas
 
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D

David Woolley

Thomas said:
My son is trying to buy a fairly new apartment in the centre of Leeds - as a
buy to live-in not as a buy to let.
I didn't know there was a Leeds in Canada. somewhere.com belongs to
"Contact Privacy Inc", in Toronto. Also, the UK has flats, not apartments.
He has a decent deposit and had a good mortgage offer from Nationwide prior
to making his offer.
Or are they worried about the long term solvency of the building - they want
to know the owner-occupancy level.
I imagine they associate high rise blocks of flats with urban decay and
are concerned that the flat may become unsaleable. Their concern is
probably not so much whether he is an owner occupier as whether it can
be sold on the owner occupier market if he defaults.

Flats with lots of buy to letters tend to have communal areas in poor
states because their tenants have no sense of ownership of them and the
buy to letter is only interested in minimising service charges, to
maximise both income and capital value (on the buy to let market).
 
T

tim.....

David Woolley said:
Thomas wrote:


Flats with lots of buy to letters tend to have communal areas in poor
states because their tenants have no sense of ownership of them and the
buy to letter is only interested in minimising service charges, to
maximise both income and capital value (on the buy to let market).
Whilst I agree with much of what you say you last points are incorrect

IME of living/owing a block of mixed OO and BTL, the BTLers aren't the
slightest bit interested in minimising their maintenance charge, they take
zero interest in the running of the block and just pay the bill that they
are sent.

and having a grotty common area will reduce the value of a flat by much much
more than having a low maintenance charge increases it.

tim
 
A

Andrew MacPherson

IME of living/owing a block of mixed OO and BTL, the BTLers aren't
the slightest bit interested in minimising their maintenance charge
As a volunteer director for our block (of only 36) for over a decade I can safely
say that most landlords don't seem to give a flying f*ck about anything as long as
they get their rent. Only a couple (out of a thoroughly depressing 20 now) ever
turn up to the AGMs and the quality of life here has definitely slipped over the
last ten years as a steady stream of temporary residents come and go.

We try hard to keep standards in the communal areas up while keeping costs down,
but if the tenants don't care and hide behind the anonymity larger blocks offer,
it's a losing battle, and it only takes a few bad apples to taint the whole block.

Fortunately for me I've worked hard to pay my mortgage off and have built up a war
chest ready for buying a house when the timing's right. I'll be glad to see the
back of this place, and very glad to be able to stop being an unpaid cog in someone
else's retirement plan. The only thing I'll be sad about is the fact I'll
inevitably have to sell to a landlord. They are the market these days, ripping the
bottom rung out of the housing "ladder".

I'm sure there are plenty of decent landlords, but they are at the mercy of the bad
ones every bit as much as other residents. And the bigger the block, the more room
for bad apples. So I can understand why some lenders will have statistics to prove
they should just steer clear. Especially now that so many amateurs are in the
market place.

The sooner the tax system starts treating everyone fairly when it comes to buying
homes, the sooner this country will become civilised again. The only flat I'd get
involved in again is in Germany, where housing is treated a lot more sensibly.

Andrew McP
 
T

Thomas

Just a quick update....

Nationwide turned my son down on the basis that they will only lend on
buildings which are at least 75% owner occupied.

Thanks for the responses.

Thomas
 
A

Andrew MacPherson

they will only lend on buildings which are at least 75%
owner occupied.
That's very interesting. Thanks for the update.

Andrew McP
 
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T

tim.....

Thomas said:
Just a quick update....

Nationwide turned my son down on the basis that they will only lend on
buildings which are at least 75% owner occupied.
and how can they find that out?

( I can see that they sometimes, by accident, might fin out, but I can't see
any way that they can *expect* to find out. There is certainly no
obligation on the borrower to go knocking on door asking and LR details
don't give this information).

tim
 
D

David Woolley

tim..... said:
obligation on the borrower to go knocking on door asking and LR details
A contact address different from the property address would tend to be
an indicator. A charge to someone who only does BTL mortgages might be
as well, although I'm not sure if that is true for many such mortgages.

A contact address that matches the property, for BTL, could indicate
that the mortgage company is being defrauded.

Although the resolution should not be down to an individual block,
census data should indicate areas with high buy to let.

It is also possible that the mortgage providers talk to each other.
 
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T

tim.....

David Woolley said:
A contact address different from the property address would tend to be an
indicator.
And how is <random> mortgage provider going to know this? All the people
who do know will be barred from telling them (even if they find out who to
ask) by data protection laws.
A charge to someone who only does BTL mortgages might be as well, although
I'm not sure if that is true for many such mortgages.
I don't think that this is going to be a significant percentage of owners.
A contact address that matches the property, for BTL, could indicate that
the mortgage company is being defrauded.
This is the concern of the mortgage provider for the BTL property. It is
information that is not within the domain of the mortgage provider for the
prospective OO property (unless by chance, they happen to be the same).
Although the resolution should not be down to an individual block, census
data should indicate areas with high buy to let.
Does it distinguish between renting from social landlords and private
landlords?
It is also possible that the mortgage providers talk to each other.
Competition laws will forbid them from doing this is a co-ordinated way

tim
 

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