Jump to content
House Price Crash Forum
Gem

Unmortgagable Property

Recommended Posts

<_<

Could anyone provide me with more information on why a property becomes unmortgagable.

I have made arrangements to see 3 properties in the last 2 months and as the viewing dates grow closer I get a phone call to say that the E.A. have cancelled my appointment as the house is unmortgagable.

This is annoying as you can imagine. Ok, the houses need some work done to them, but not as much as would be involved in a renovation plus I only needed just over half the mortgage as I had the rest in cash.

I know many years ago, my parents bought a house under the agreement that they had to carry out the work within a specific time scale.

Shouldn't it be up to me to find a mortgage on this property?

Am I being stiched up?

Share this post


Link to post
Share on other sites

Alot of houses built after the war, known as pre-fabs, are unmortgable. This is because they were built to last 20, 30, 40 years (?) and should of been demolished. But no one did. Therefore a mortgage company won't lend any money on it as it could fall down.

Other reaons could be structural problems like subsidence.

Share this post


Link to post
Share on other sites

<_<

Could anyone provide me with more information on why a property becomes unmortgagable.

I have made arrangements to see 3 properties in the last 2 months and as the viewing dates grow closer I get a phone call to say that the E.A. have cancelled my appointment as the house is unmortgagable.

This is annoying as you can imagine. Ok, the houses need some work done to them, but not as much as would be involved in a renovation plus I only needed just over half the mortgage as I had the rest in cash.

I know many years ago, my parents bought a house under the agreement that they had to carry out the work within a specific time scale.

Shouldn't it be up to me to find a mortgage on this property?

Am I being stiched up?

They are doing you a favour. These are crap properties with structual damage or something like it.

Share this post


Link to post
Share on other sites

There could be a number of reasons like structural problems, subsidence, contaminated land, pending compulsory purchase, maybe unconventional construction like steel framed buildings, or 'concrete cancer' (Alkali Silica) in some cases.

To be honest it sounds like the agent is feeding you detritus, these sort of properties haven often been unsalable for a number of years. A high tide raises all boats, including ones' with holes in the bottom.

Edited by BuyingBear

Share this post


Link to post
Share on other sites

non standard build also I think.

Piece in the independents property bit today about some former restaurant windmill in chichester for sale for 895k. But you wouldn't be able to get a mortgage on it without negotiating a lease for the carpark...

http://www.findonvillage.com/0810_barnham_windmill.htm

think its this one

Says its being marketed by http://www.jackson-stops.co.uk/home.html

Edited by SarahBell

Share this post


Link to post
Share on other sites

Thanks for the reply.

However, as I know the area quite well I cannot (using own judgement) see any reason for these houses to be unsafe. They are mid link houses which are not at risk of subsidance or flooding.

I just had the impression that they were trying to dissuade me from the very first point of contact. I guess I will have to contact the lenders and ask their opinion.

Share this post


Link to post
Share on other sites
Thanks for the reply.

However, as I know the area quite well I cannot (using own judgement) see any reason for these houses to be unsafe. They are mid link houses which are not at risk of subsidance or flooding.

I just had the impression that they were trying to dissuade me from the very first point of contact. I guess I will have to contact the lenders and ask their opinion.

You got a link? Then we can investigate further for you. We have too much time on our hands :blink:

Share this post


Link to post
Share on other sites

However, as I know the area quite well I cannot (using own judgement) see any reason for these houses to be unsafe. They are mid link houses which are not at risk of subsidance or flooding.

Unless you're a surveyor you might not know, I don't mean that in a patronising way, us lot on here could look at the property and think it looks ok, but a structural engineer may take a different view, some box ticking surveyors may not strain themselves either.

Is there a history of coal mining in the area? Try Home Check

Edited by BuyingBear

Share this post


Link to post
Share on other sites

Thanks for the reply.

However, as I know the area quite well I cannot (using own judgement) see any reason for these houses to be unsafe. They are mid link houses which are not at risk of subsidance or flooding.

I just had the impression that they were trying to dissuade me from the very first point of contact. I guess I will have to contact the lenders and ask their opinion.

Are you a surveyor or builder? If not your judgement is worthless. My friend bought one of these nightmares with cash he borrowed from his parents. Nice and cheap...2 yrs later and he still has not moved in. Underpinning alone is costing him 35K. Auctions are full of these disasters.

Seek professional advice...

Edited by Pluto

Share this post


Link to post
Share on other sites

Unless you're a surveyor you might not know, I don't mean that in a patronising way, us lot on on here could look at the property and think it looks ok, but a structural engineer engineer may take a different view, some box ticking surveyors may not strain themselves either.

Is there a history of coal mining in the area?

Just one question. BuyingBear. Do you really look like Brad Pitt with a cup of tea?

Share this post


Link to post
Share on other sites

The property might be unmortagable but I believe some lenders will still lend money based on what the land is worth. So in most cases this is more than what the house is worth.

Share this post


Link to post
Share on other sites

Alot of houses built after the war, known as pre-fabs, are unmortgable. This is because they were built to last 20, 30, 40 years (?) and should of been demolished. But no one did. Therefore a mortgage company won't lend any money on it as it could fall down.

Prescott wants to build some more of them as part of his 'marginalising low earners' project. :rolleyes: Needless to say mortgage companies have expressed concerns as to the mortgageability of them due to their relatively fragile constructon.

Share this post


Link to post
Share on other sites

Are you a surveyor or builder? If not your judgement is worthless. My friend bought one of these nightmares with cash he borrowed from his parents. Nice and cheap...2 yrs later and he still has not moved in. Underpinning alone is costing him 35K. Auctions are full of these disasters.

Seek professional advice...

Fair comment. I come from a family of professional builders (but still cannot afford to buy land to build, with the current ridiculous prices). They have seen the house externally and have information on the property. They cannot see any real reason for this house to be unmortgagable.

Share this post


Link to post
Share on other sites

Thanks for the reply.

However, as I know the area quite well I cannot (using own judgement) see any reason for these houses to be unsafe. They are mid link houses which are not at risk of subsidance or flooding.

I just had the impression that they were trying to dissuade me from the very first point of contact. I guess I will have to contact the lenders and ask their opinion.

a 50% deposit means that they are not worried about negative equity..

and if it's the property not you..

and its been several..

Have you slept with the mortgage providers valuator and not called her?

Share this post


Link to post
Share on other sites

a 50% deposit means that they are not worried about negative equity..

and if it's the property not you..

and its been several..

Have you slept with the mortgage providers valuator and not called her?

Hmm.... Thanks for that, but I'm not that way inclined. However, if it got me the house, I'd consider it :P

Share this post


Link to post
Share on other sites

Hmm.... Thanks for that, but I'm not that way inclined. However, if it got me the house, I'd consider it :P

chances are though.. if they don't want to lend money against a particular property there is good reason..

that or they are all weird..

and Gem, that would makes sense that you were female..

But hell its a modern world

Share this post


Link to post
Share on other sites

Gem,

Multiple houses and they've told you that?

Seems very odd, unless something seismic has happened to the area / lender stipulations in the last few months as the agnets would know whether there are any specific problems.

Call their bluff, call back to arrange viewings, say that you have unexpectedly come into some money/have been given some inheritance early / whatever so you no longer need a mortgage and see what they say.

I have been rung up before on the day of a viewing to cancel, I should have insisted on going or got in contact with the owner and bypassed the agent.

If you can provide some links to the property we could have a look and see if there is anything that can be found out about it.

Share this post


Link to post
Share on other sites
Guest Charlie The Tramp

It might be worth while to get a civil engineers report. I had a similiar problem with a 140 year old property. After his positive report there were no further problems in obtaining a mortgage for my prospective buyer. The property was out of plumb but the report merely said it was rotation of the foundations which in his opinion happened 20 years from the time of build.

Share this post


Link to post
Share on other sites

Why exactly is it difficult to get a mortgage for steel framed houses? I have never understood this because steel framed commercial buildings are commonplace and it is a tried and tested method of construction.

Share this post


Link to post
Share on other sites

Just one question. BuyingBear. Do you really look like Brad Pitt with a cup of tea?

No, I like coffee usually.

Why exactly is it difficult to get a mortgage for steel framed houses? I have never understood this because steel framed commercial buildings are commonplace and it is a tried and tested method of construction.

Yeah, but they were probably architecturally designed and built to a certain standard, even still, most of the blocks built in the 60's are in poor shape and many have been recald or pulled down. The system built housing wasn't exactly to a high standard as everything was done for speed, the metal frame rusts and the concrete crumbles, and the foundations are questionable. The lenders wouldn't accept this as collateral as Parliament technically condemned these buildings years ago.

As others have mentioned you also have possible asbestos cement sheet, remember 'Call Yourself A Property Developer'?

Many were deemed defective under the Housing Defects Act 1984 later incorporated into the Housing Act 1985

Non-traditional properties are generally referred to as system built or pre-fabricated. These systems fall into four broad categories which refer to their wall construction, i.e. in-situ concrete (concrete poured on site but normally using pre-fabricated shuttering), precast concrete (precast panels and/or frames assembled on site), metal frame (sometimes using concrete or brick cladding) and timber frame (sometimes using concrete or brick cladding). The UK has considerable experience of prefabrication for house construction with around 1 million dwellings constructed by such methods. The majority of these dwellings were built between the end of the World War II (WWII) and the early 1970s, as a result of the need for quick building and the replacement of housing. The range of systems and construction techniques used has been extremely varied. The Building Research Establishment (BRE) has listed over 500 systems built between 1919 and 1976

The thermal efficiency of these non-traditional housing varies significantly by design. In practice, the majority of investment has occurred in those properties that were designated as potentially defective under the 1984 Housing Defects Legislation; later the Housing Act of 1985. Therefore the study has ensured that information best practice and case study information has been requested on both non-traditional housing in general and designated properties

[..]

In the concrete systems, the majority of problems occur because of either the carbonation of concrete or the presence of chlorides in the concrete. This often results in the corrosion of steel reinforcement and subsequent cracking and spalling of the concrete. The issue of carbonation is exacerbated in many of these systems by the slenderness of many of the components, which offers comparatively little cover to the reinforcement. Following the Acts introduction, the Government introduced Defective Housing grants to remediate those properties designated defective. These grants were available until 1999, but in reality many local authorities are still performing work on these properties.

Although those designated as potentially defective are not necessarily the most thermally inefficient, their performance is poor and often regarded as amongst the worst displayed by system built housing. Concrete has an extremely low thermal resisitivity, and therefore both defective and non-defective dwellings with concrete wall construction have poor U-values. The poor thermal performance of concrete and often non-cavity design of walls results in low SAP values and high running costs.

Edited by BuyingBear

Share this post


Link to post
Share on other sites

The most common reasons for a property being unmortgageable are non standard construction, high rise buildings, in an area subject to flood/subsidence, non-standard construction, area/land on which property is built (near old mines, slag heaps etc), being subject to an imminent condemnation order/compulsory purchase order or being above/in very close proximity to retail or licensed premises or food outlets. Request a copy of the valuation report as the reason should be stated on this.

Share this post


Link to post
Share on other sites

Hi Gem,

Only the lending institution can refuse to mortgage a property. All the EA can do is advise you that there are problems with the property that might make obtaining a mortgage difficult.

If as you say, the EA's are advising you that the property is "unmortgagable", did you not ask them why it was "unmortgagable" ???

You say you come from a family of builders, and know of situations where work on a property has to be carried out in a specified time frame before the lending institution will agree to a loan on the property. So surely you are no stranger to this situation ?

If the EA knows that you would be unable to mortgage the property, then s/he obiously knows exactly why you would be unlikely to get a mortgage.

Don't ask us, ask them ! We can tell you almost any kind of crap, if an EA tries that sort of thing, then he better make good and sure his indemnity insurance is up to date.

If you want to know something, ask the person most likely to know......ask the EA or the vendor :)

Share this post


Link to post
Share on other sites

two kitchens is often a sign of not being mortgageable... lenders don't like the thought that someone might have split it illegally.

Whatever the reason, if the agent won't tell you why they are not mortgageable then I am surprised and would be suspicious that they are up to something "passing to friends on the cheap etc."

Or maybe they think you are an HPC'er who is bearish, therefore likely to offer low, therefore a timewaster (from the point of view that if they think that you are unlikely to offer what the vendor wants then they should be spending their time on someone else who might)?

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...

  • Recently Browsing   0 members

    No registered users viewing this page.

  • 301 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



×
×
  • Create New...

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.