Owner occupier mortgage problems

[lgreenhalgh7_hotmail_com]

Hello, i was wondering if anyone could help me? I own unencumbered at flat worth 83k in a ltd company which is leesehold and ex council.it's in a great location and yeilding well. I'd like to release the equity to invest however have been rejected by two seperate mortgage lenders - keystone and foundation homes both times because there's not enough 'owner occupiers' in the area... basically the council own too many. I was wondering if anyone has any ideas to help me? I think i need some inovative out of the box ideas to try here! Cheers

 

Laurence 

[Simon Allen]

Hi Laurence

This is very common and the percentage of privately owned properties is essential. If you don't know this figure the easiest way is to search for the title of the freeholder at the land registry by using the usual address search and it will then show the number of leases (privately owned) that have been issued. It does concern me that you have used Keystone and Foundation as if this was through a broker and you have spent money I will be asking for some of it back. They are the same lender under different trading names and whilst criteria is slightly different not for something as fundamental as this.

The freeholder can impose extortionate costs for the repair and management of the building onto all leaseholders and unfortunately some councils have a reputation for taking advantage of the private owner.

[lgreenhalgh7_hotmail_com]

Hi Simon thanks for your reply. My Broker did get my money back from them, so have only paid for mortgage broker research fee.  I think if i buy ex council again this will be something i research before! What a Pain

[Simon Allen]

It is very difficult to research everything is so much information is not published and is only discovered by a broker when they regularly deal with a lender. What does concern me is that you have paid a broker research fee and your broker has come up with the same lender twice. The approach for this type of transaction when it is known that his ex-council should be a quick how many are privately owned and until that percentage is provided no further work should be carried out.

I would suggest if you use this broker again that the research fee is carried over to your next mortgage application.

[Bridging Expert]

There are a couple of new BTL lenders in the market that may consider.

 

If you want to PM me with some details on location and how much you're looking to raise I can speak with them for you before any formal application?

[lgreenhalgh7_hotmail_com]

Thanks for your responces and i have sent a PM

[RobertR]

On 2/26/2018 at 5:45 PM, simon allen said:

This is very common and the percentage of privately owned properties is essential. If you don't know this figure the easiest way is to search for the title of the freeholder at the land registry by using the usual address search and it will then show the number of leases (privately owned) that have been issued. 

 

Hi @simon allen, could you expand on this? I'm trying to come up with a rule of thumb to estimate the owner occupancy on potential building blocks where I think investment would be good.

 

I tried what you said but I can't seem to get the information I need to make a good assumption on the number of owner occupiers vs private renters.

 

What I did was: I accessed this website: https://eservices.landregistry.gov.uk, searched for the postcode and purchased the freehold from the flat I was interested in. There is a list of properties that matches the list you get for free, but no word on if they bought for owner occupy it or rent it out. I also bought the leasehold just to double check but apart from the lenders name used for the mortgage I couldn't get much from it either. I guess it's helpful to know if someone bought cash or mortgage but not much else.

 

Thank you.

[Simon Allen]

Hi Robert

 

There are various steps for you:

• Identify how many properties are in the block
• Identify the number of postcodes for the block
• Usually, there is just one postcode
• Search for that postcode on  land registry https://www.gov.uk/search-property-information-land-registry
• You do not have to buy a title
• The council will own the freehold
• The land registry search will identify the number of leases created. A lease is created when the council sell that property to a private individual

 

As an example you identified at the block has 40 units. You check with postcode finder that the 40 units are all registered with one postcode. Then you input that postcode into the land registry and a freehold will appear along with a bunch of leases. Count the number of leases against the number of properties in the block and you have your percentage.

 

Or you identify the freehold and purchase the title. Within the freehold it will show you the number of leases that have been created and then compare to the number of units in the block and workout your percentage. I would expect a decent broker to do this before they submit an application.

 

To establish properties within a postcode that are rented then check streetcheck.co.uk under the housing tab as it will tell you how we properties are in the postcode and how many are rented out. Again your broker should be looking at this if they understand the market.

[RobertR]

Thanks @simon allen, seems like a reliable way of checking for percentage of  council flats in a block.

 

Do you know of a similar way to get an estimate on owner occupiers on blocks without council flats? I've had an issue where I tried to get a mortgage for a BTL only to be refused because most of the apartments were owned by investors instead of owner occupiers. Problem is I haven't been able to estimate this number before applying for the mortgage. 

[angelinam]

On 2/26/2018 at 5:45 PM, simon allen said:

Hi Laurence

This is very common and the percentage of privately owned properties is essential. If you don't know this figure the easiest way is to search for the title of the freeholder at the land registry by using the usual address search and it will then show the number of leases (privately owned) that have been issued. It does concern me that you have used Keystone and Foundation as if this was through a broker and you have spent money I will be asking for some of it back. They are the same lender under different trading names and whilst criteria is slightly different not for something as fundamental as this.

The freeholder can impose extortionate costs for the repair and management of the building onto all leaseholders and unfortunately some councils have a reputation for taking advantage of the private owner.

Hi @simon allen

I wonder if I can could trespass on your time and come back to you on this post which is a couple years old now. I have a mortgage offer on a new build development flat which I have just found out will be 1 of only 4 owner-occupied in the building of around 50 flats and the rest let directly on the private rental market by the developer. As its a new development this fact may not have come to the awareness of the underwriter. However I am concerned there could be issues with selling or remortgaging in future. Do you have any comments on what approach lenders would take generally? 

[Simon Allen]

Hi. It's down to the valuers opinion and 8% private and 92% rented is usually not a good sign. It is the opinion of the lender that investors will bail out before owner occupiers if property prices fall. Also you will be in competition with all the other landlords when your property becomes vacant.