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Lenders deeming my area of investment as Investor lead. What should I do?

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I’ve reserved a 2 bed apartment at Baltic View in the Baltic Triangle area of Liverpool. Contracts have been exchanged.

I am now really concerned as build is complete any week now and I am still without a mortgage.

We were going through the mortgage process just as Covid hit. Originally this was with Virgin for 1.77%.

My broker told me Virgin pulled all of their products.

I was receiving a lot of pressure from my broker and PH/developer to apply for another product ASAP. The alternative provided was a Barclays product @2.45%, I waited a week to see if anything improved and then gave the go ahead.

Two weeks later I was told the product had been pulled and replaced but at 2.65%. 

After rechecking the maths I gave them the go ahead that day to proceed. The application was accepted pending valuation, I’ve paid the £205 valuation fee to Barclays to now just be told Barclays don’t want to lend on this development as it’s investor lead. 

Multiple other lenders are now not lending in this area due to oversupply, the ones that are, are offering some pretty dire choices.

I’ve now been offered a 5 year variable rate (currently at 2.85%) as the cheapest option. £100 per month higher than the original Virgin product.

Alternatively a 2 year fix at @ 3.35%
or a 2 year discounted variable @ 3.00% with a floor of 2.25%.

I honestly don’t know what to do now. I have never used variable rate products before and I don’t fancy fixing at 3.35% when I know people have got products in this development at less than half that rate.

Should I just suck it up and fix, learning the lesson that you shouldn’t let your broker leave you to the bottom of the pile?

Or should I take the 2 or 5 year variable? Does anyone have any experience of variable products?

As we have exchanged contracts, I’m not sure if or how I could pull out of this deal either.

Any advice would be greatly appreciated.

Thank you


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11 minutes ago, dorsetalex said:

Should I just suck it up and fix, learning the lesson that you shouldn’t let your broker leave you to the bottom of the pile?

I dont really understand this part. Sounds like the delays were your side and the issues outside everyones control?

If i were you i would scour that contract for any possible opportunity to get out of it. Are there contingencies for not being able to source financing? Are their Force Majure contingencies, anything. I'd start putting any money into a good lawyer to get you out of this rather than chasing a mortgage that isnt going to happen.

The other option is just wait. The only people with more to lose here are the developers. You wont be the only one missing completion deadlines and so you can probably defer completion much further than you anticipated.

Unfortunately Liverpool, Leeds, Manchester were all oversaturated long before COVID kicked off. These days, who is going to jump at the chance to live with 500 other people in a 2 bed apartment in a big city centre sharing lifts and corridors, when the same money could get you a nice semi in the suburbs with a garden. Its not like anyone who would rent in the city centre is going to be commuting, they will work from home if they have any sense.

Added to that i believe Baltic View have guaranteed rent options, i presume to help sell them, but lenders hate this and will decline even if you dont take them up on it because it distorts the true demand and will lead to a cliff edge of reposessions when it expires.




043_logo_final_03.png.0cdf828351f81e6097208048ac2d018d.pngStuart Phillips

Independent, Whole of Market Mortgage Broker & BTL Specialist

AALTO Mortgages Ltd

Web  www.aaltomortgages.com

Email  sales@aaltomortgages.com

Call  020 7183 1101

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Hi Stuart,

Thank you very much for taking the time to respond and for your advice.

Regarding the quote, I reserved this flat off plan. There was a bit of time between reservation and mortgage broker appointments as completion was 18 months away so I was happy for the broker to make contact nearer the time. The lesson there I think is to not leave anyone else to it, I should have chased the broker as soon as we were 5/6 months out from completion.

I wasn’t aware of a guaranteed rent option for this development and I’m surprised PH Invest would source somewhere that did.

After reading the contract I cannot see any clauses relating to Force Majure but I will discuss this with my solicitor.

Thanks again. 

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  • 2 months later...

Hi Alex,

Just wondered how you got on and whether or not you stuck with the purchase or found a way to get out? I have a 1 bed reserved at this development and have mixed views on the whole process and now  the finished product following a site visit this week. This probably isn’t the place to air my thoughts at the moment but would be happy to discuss direct if you want to drop me an email. Cemeehan@hotmail.co.uk 

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