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Mortgage refused as apparently no demand for BTL, wtf.


skippie

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So I bought a 2 bed flat some months ago, due to the deal I got, I agreed to purchase it cash.

Anyway, I’m now going through the refinance with Paragon, who I’ve used before and tbh are not great.

Survey/valuation done and has been declined as the surveyor claimed there is no demand in the area for rentals, which is ridiculous.

I already own the flat next door, bought 2 years ago, tenanted since.

This flat has has a tenant in since the refurb was completed.

Both 2 bed flats, 2 miles from the city centre, 15 minute drive from the M6, plenty of local amenities etc etc.

Has anyone else been in this situation and more importantly managed to overturn via appeal?

 

thanks in advance.

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Forget the appeal - waste of your time.

Did you present the valuer with any evidence of rental demand in the area? Valuers are sometimes "out of area" and need, shall we say, a little push in the right direction.

And if your chosen mortgage provider is "tbh not great" then change them.

Use a decent broker with access to whole of market and who give great advice - you can feel a recommedation coming here can't you!

Here it is! https://cyborg.finance/  Mark or Adam will do you proud. 

 

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Paragon dont have the best reputation in the market.

Right now, lenders have lots of business due to the stamp duty holiday. Because they dont need the business, some lenders are taking a 'don't care less' attitude 

_______________________________________________________________________________________________________________________________
Vin Gupta
Property Investor and Developer
UK Property Blog: https://evolutionblogger.com/article/uk-property-articles
Travel Blog: https://soulfultravelguy.com/

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On 12/11/2020 at 4:59 PM, EvolutionBlogger said:

Paragon dont have the best reputation in the market.

Right now, lenders have lots of business due to the stamp duty holiday. Because they dont need the business, some lenders are taking a 'don't care less' attitude 

I dont think its so much of a 'dont care' attitude, but as you say there's a lot of business swinging by some lenders at the moment and it would seem some are having their in house surveyors cherry pick what they deem to be the better assets for lending purposes. 

Appeals will be useless if the underwriters have already decided they don't like it so would concentrate on finding an alternative lender. 

 

Property investor ¦ Commercial Finance Broker ¦ Ex banker with 20 years lending experience. 

Commercial Lending Manager at Real Finance Ltd - www.realfinance.co.uk
Happy to discuss any queries regarding property finance for  Company/Complex BTL, HMO, MUB, Holiday Let, Commercial, Bridging & Development.  

kirsty@realfinance.co.uk
07494949852

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18 hours ago, kirsty_c said:

I dont think its so much of a 'dont care' attitude, but as you say there's a lot of business swinging by some lenders at the moment and it would seem some are having their in house surveyors cherry pick what they deem to be the better assets for lending purposes. 

Appeals will be useless if the underwriters have already decided they don't like it so would concentrate on finding an alternative lender. 

 

I'm not sure the lenders are savvy enough to cherry pick the best business

_______________________________________________________________________________________________________________________________
Vin Gupta
Property Investor and Developer
UK Property Blog: https://evolutionblogger.com/article/uk-property-articles
Travel Blog: https://soulfultravelguy.com/

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3 hours ago, EvolutionBlogger said:

I'm not sure the lenders are savvy enough to cherry pick the best business

I have worked in banks, in Underwriting teams and within Risk. All lenders have appetite for certain flavours of business and that appetite will change with the financial climate. Lenders are cautious at the moment (I don't blame them) and have tightened criteria on a lot of assets. 

Whether the strategy they implement is effective is another question ;)

Property investor ¦ Commercial Finance Broker ¦ Ex banker with 20 years lending experience. 

Commercial Lending Manager at Real Finance Ltd - www.realfinance.co.uk
Happy to discuss any queries regarding property finance for  Company/Complex BTL, HMO, MUB, Holiday Let, Commercial, Bridging & Development.  

kirsty@realfinance.co.uk
07494949852

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6 hours ago, kirsty_c said:

I have worked in banks, in Underwriting teams and within Risk. All lenders have appetite for certain flavours of business and that appetite will change with the financial climate. Lenders are cautious at the moment (I don't blame them) and have tightened criteria on a lot of assets. 

Whether the strategy they implement is effective is another question ;)

I spent 15 years working for the biggest investment banks in the world. I have some experience too. All of these underwriters have hit their targets for 2020. That's why they're not receptive to new business right now.

In 2021, their targets reset to 0. So they will view the same applications differently..

In my experience, most underwriters have a limited grasp of property investment. 

If you're interested, I have an about me page on my blog.

https://evolutionblogger.com/about-me

_______________________________________________________________________________________________________________________________
Vin Gupta
Property Investor and Developer
UK Property Blog: https://evolutionblogger.com/article/uk-property-articles
Travel Blog: https://soulfultravelguy.com/

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On 12/8/2020 at 7:16 PM, skippie said:

Survey/valuation done and has been declined as the surveyor claimed there is no demand in the area for rentals, which is ridiculous.

I have never heard this before, and I can't believe I'm hearing this from a valuation with the rental market as it is. 

But every day is a learning day!

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On 12/14/2020 at 6:37 AM, EvolutionBlogger said:

I spent 15 years working for the biggest investment banks in the world. I have some experience too. All of these underwriters have hit their targets for 2020. That's why they're not receptive to new business right now.

In 2021, their targets reset to 0. So they will view the same applications differently..

In my experience, most underwriters have a limited grasp of property investment. 

If you're interested, I have an about me page on my blog.

https://evolutionblogger.com/about-me

Hi Vin

My comment wasn't to discredit your post or your experience but to add my 2p in the mix from my own experiences. Different banks do things very differently especially so with larger banks who are often too big to care vs smaller lenders who have to evolve and think outside the box to stay relevant. 

When I worked in underwriting we didnt have any targets (other than general workload) so it wouldnt have made any differnece to a decision I made which year we were in. Different setup's in different places I guess. 
I do know from speaking to various BDM's that some lender's appetite has been adjusted towards assets their in house surveyors like, and the ones they dont like are getting thrown out for nonsense reasons. Suspect the one above by the OP has fallen under this as has a few of our recent cases. 

Property investor ¦ Commercial Finance Broker ¦ Ex banker with 20 years lending experience. 

Commercial Lending Manager at Real Finance Ltd - www.realfinance.co.uk
Happy to discuss any queries regarding property finance for  Company/Complex BTL, HMO, MUB, Holiday Let, Commercial, Bridging & Development.  

kirsty@realfinance.co.uk
07494949852

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Thanks for your replies.

I have done my due diligence and out of 8 identical flats in the row, 5 are let most to tenants of 3 plus years.

As mentioned in my post, I let the flat in question in a matter of a couple of days for really good money.

tbh, if any more become available I would have no hesitation in buying them.

I’ll report back on the appeal, which is with Paragon now.

 

Nick.

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