The Benefits of a Lenders’ Attitude to Property Surveyance

In the last blog post, we provided tips to help home buyers with a mortgage to ensure security for their Lenders. We discussed how there are huge benefits to hiring a local and knowledgeable surveyor with a good understanding of lending requirements.

But it’s not just homeowners buying with a mortgage that could benefit from this kind of guidance.

Surveyor Services for Cash-Buyers

Cash buyers can also gain an advantage in the property market by seeking advice from a surveyor with a Lenders’ approach to determining whether a property provides satisfactory or unsatisfactory security.

It’s safe to say that most cash purchasers will want to sell their property on at some time in the future. But if they don’t seek out help from a surveyor when they purchase their property, it’s likely that they will be at a disadvantage to buyers with a mortgage as they will not be aware of any inherent issues that would otherwise be flagged by a residential valuation surveyor and cause the Lender to deem the property as unsuitable security. This would not only restrict the number of potential buyers considerably but is also likely to have an impact on the property’s resale value.

In the previous post, the type of construction and location of a property were referenced as factors that residential valuation surveyors take into account when they determine whether it will be acceptable to a Lender or not. Therefore, a surveyor that doesn’t carry out mortgage valuations is unlikely to be able to spot issues that would instantly raise alarms bells for Lenders.

What Constitutes Acceptable Security For Lenders?

Unfortunately, Mortgage Lenders do not have a unified code of guidance as to what constitutes ‘acceptable’ or ‘unacceptable’ security. Each Lender has different views on what is acceptable and what is not. For example, when a building defect or other issue is noted during an inspection, one Lender might require the residential valuation surveyor to immediately decline the property – whereas another Lender would instead require further investigations to be carried out to assess the extent of the problem. If there is evidence of progressive or structural movement, this Lender would perhaps request a report from a structural engineer prior to the release of funds to purchase the property.

Evolving Lender Guidelines

Amongst the many different Mortgage Lenders out there, there are also widely varying attitudes to other potential issues or building defects, including dry rot, re-roofing and electrical re-wiring. As Lender guidance evolves, it’s clear that even attitudes to previously unspeakable issues as Japanese knotweed can change. And that’s exactly why it pays to appoint a surveyor that’s experienced and already engaged in dialogue with Mortgage Lenders.

Surprisingly, this is not a necessity for home-buyers; a surveyor without any working knowledge of Lender guidance can produce a report for potential homebuyers that will satisfy RICS requirements by providing certain information about the condition of property.

But buyer beware: what this report won’t do is protect the homebuyer from issues which may arise when they come to resell the property.

If you’re looking to buy a property and would like to speak to a surveyor with extensive experience of Lender guidelines and requirements in and around North-West London, please call Hilltop Surveyors on 07932 907267 or email info@176.32.230.7

 

Properties Unsuitable for Mortgage Security – and how to avoid them

Sometimes, mortgages are declined on the basis that they are considered unsuitable for mortgage security by some Lenders.

For prospective buyers looking for a mortgage, this is a big deal – but it’s also an issue for cash buyers, presuming they plan to sell their property in the future to others who may also be reliant on help from Lenders to secure their new home.

Guidance from Mortgage Lenders is provided to Surveyors inspecting a property about what they should report on – and it’s on this basis that a property may be declined mortgage funding, sometimes to the surprise of the would-be homeowner.

There’s a range of factors that prospective purchasers should be aware that may limit the future marketability of a property or increase the property’s potential to deemed unsuitable for mortgage security by a Lender. Here are just a few of them:

The Location of the Property

Where a property is located is an important consideration. Non-residential uses in the vicinity that could be considered to cause a nuisance by virtue of smell, noise or unsociable hours may be declined. This is especially relevant for flats that are located above non-residential uses (shops, restaurants, pubs etc.).

The Origin of the Property

The origin of the property within the public or private sector may also be of relevance, as well as any aspect such as shared ownership. A surveyor may be asked to decline a property if they have any concerns about future marketability in regard to these factors.

The Construction of the Property

Properties that have been altered may not be considered suitable security. Where there is evidence of non-conventional methods of construction (as opposed to traditional construction) in a property, Lenders may decline a mortgage. Also, properties with features such as single-skin brickwork/sub-standard walls may deter a Lender, even if this wall forms only a small part of the property. Other construction factors which may be relevant to a Lender’s determination of the mortgage security include properties where there is a ‘flying freehold’.

If the Property is a Flat

There are varying Lender-determining criteria for flats including the type of construction, number of floors in the block, whether the block was originally constructed for the public or private sector, whether the block was purpose built or converted and flats located in blocks that contain or are close to non-residential uses – to name but a few. With converted flats, factors such as the quality of conversion, layout and facilities as well as management arrangements for the block may determine whether the property is suitable for mortgage security.

Of course, the above list of conditions is not exhaustive, which is precisely why so it’s vital for prospective purchasers to ensure that the surveyor they choose to carry out their homebuyers report has a good understanding of Lender’s requirements.

To find out more about Mortgage Lender’s requirements or what to look for when viewing a property, get in touch with Hilltop Surveyors on 07932 907267 or email: info@176.32.230.7.

Houses Prices Fall Everywhere but London & East

According to new information from the Land Registry, house prices in all regions of England and Wales have suffered a decline, everywhere but in London and the East, The Telegraph has reported.

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The Land Registry has recorded that overall, house prices in England & Wales fell by 0.5pc in March 2016 with the biggest drop in prices affecting Yorkshire and Humberside at a dip of 2.6pc.

(Most) London Prices Continue to Rise

Whilst everywhere else experienced a slight slump, mainstream prices in the capital continued to rise most likely due to lack of stock and a growing population. Mainstream house prices in London increased by 0.2pc with the average house price now standing at £534,735. However this figures exclude the luxury end of the market, which has experienced a significant price dip of 10pc.