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Most banks refuse to lend on a new build flat

Is it safe to buy a new flat where only 1 in 4 banks agree to lend money due to its high service charge and shared parking area with commercial properties? Could we experience issues in the future if we decide to sell?

Asked on Mar 3 2016, New Homes in Peterborough | Report content

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  • If you are having difficulty getting a mortgage for these reasons then so will others, so the pool of potential buyers in the future will be reduced. Probably the sort of property that would attract BtL at the right price, I would not consider it a good buy as an owner-occupier.

    Answered on Mar 4 2016, Report content
  • Absolutely you could experience difficulty if you decide to sell in the future. One reason could be that the banks do not wish to "over-expose" themselves on a block of flats and typically will not lend on 20% of flats. Let's say that you have 100 flats in your block. And the bank has lent against 20 of them, they wouldn't lend you now because of the over exposure. It is about managing risks for the bank. One thing for sure you do not want to be the one selling an umortgageable property in future, as it seriously affects the value.

    Answered on Mar 5 2016, Report content

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