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Join our Property forum for renovation, DIY, and house selling advice.

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Property/DIY

Just lost 100k off the value of my flat

21 replies

Azquilith · 10/03/2014 21:40

I bought a flat in London two years ago. At the time, I found out that only one bank would mortgage the flat because of the kind of build it is. I still got a good rate and didn't think much of it. I have just found out that this lender has withdrawn lending on the entire block of flats and that they will all be cash only to buyers. An estate agent I spoke to advised that we'd lose 100k off the flat unless we sell immediately 'before word gets round' as there are cash buyers out there, and we might only lose 50k. I don't know whether this is just estate agent spiel to get me to market the flat, and whether I should hang on, or whether being cash only to purchasers is really so bad? Please share advice and or wine...

OP posts:

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Mrsladybirdface · 10/03/2014 22:01

what construction is it?

invicta · 10/03/2014 22:02

Why don't you speak to other estate agents to get their view?

MuttonCadet · 10/03/2014 22:04

Shit that's awful, no advice but have some

Chloerose75 · 10/03/2014 22:09

When was it built and what is the problem with the building? I'm not sure about "word getting round" because surely the buyer would find out in the course of their searches and enquiries anyway if there was a problem

Azquilith · 10/03/2014 22:12

It was built in the 70s as local authority, it's made out of concrete. Now all private. Thanks for wine MuttonCadet. Good shout on other EA invicta

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thatstoast · 10/03/2014 22:13

What's the issue preventing lenders offering a mortgage? Where in London are you and what price does the estate agent think you can get for it now? If you're in a desirable area there's always likely to be someone who'll buy it on a buy to let basis but worth thinking that a cash buyer looking to invest is always going to be looking for the lowest price. They'll have the upper hand if the mortgage situation remains the same. However lenders change their policies frequently so products may come onto the market in the future which will solve the problem.

Also, is the flat your main residence? If so, do you want to move? Or are you only thinking about doing so because of the mortgage issue?

There's a lot of factors to consider

walkingdeadmama · 10/03/2014 22:15

I had a concrete prefab flat. On an estate and wanted to move out of london to gave my dd. had 9 local estate agents come value it. 7 of them told me u couldn't get a mortgage on it and it would be cash buyers only for a buy to let and they all valued it within 10k of each other. One said it was a nice flat and worth a bit more so valued it at 20k above but the ones we went with saw the ppotential and told us it would be easy to sell and they were the nicest so we went with them sold in 4 weeks and got 85k more than the lowest valuation!
Id do a bit of research and see what ea sold in your area and get a few to value before you lose heart

Azquilith · 10/03/2014 22:19

The issue is something to do with the fact it's made out of concrete, we don't really want to move but the EA said that if we sold now we'd likely only make a 50k loss whereas if we waited 6 months it would be 100k.

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bumbumsmummy · 10/03/2014 22:27

You need to do some more research hate to be a cynic but EA are like bankers they would sell their soul to make a quick buck

And I'm sorry to say that includes duping you out of thousands

thatstoast · 10/03/2014 22:28

Have you spoken to a broker to confirm there's no lenders out there that would provide a mortgage? Are you mortgage free? If not what will happen when your current product ends?

You say you don't want to move now but would you expect to move in the next few years anyway? I would say, if you can confirm with a broker that no mortgage products are available on the property and you would have moved in the next 3-5 years then it might be worth the upheaval now.

walkingdeadmama · 10/03/2014 22:30

If you dont want to move you shouldn't! Its london so chances are the value will go up the longer u stay anyway ...

thatstoast · 10/03/2014 22:31

Agree with bumbumsmummy that you shouldn't trust estate agents. However I'm a banker so maybe you shouldn't trust me either

EverybodysStressyEyed · 10/03/2014 22:34

I wouldn't trust the estate agent.

Depending on where you are in London there will always be cash buyers who are interested in buy to let or just parking their money.

Are you 100% sure you couldn't get a mortgage on it? Might be more expensive but most things are possible (at a price!)

Bumblebzz · 10/03/2014 22:35

I really wouldn't trust what an EA tells you.
London is booming, no idea how they can guarantee a 100k drop, that's got to be a sizeable % of the property value.

I have seen all sorts of dodgy EA goings on, including a house we bid on selling for less than our bid (i know this thanks to price transparency we sites like nethouseprice.co.uk).

If you really are worried, call a few banks and see if they'll remortgage YOU, that's a good indicator of whether or not there is an issue.

Azquilith · 10/03/2014 22:40

I haven't spoken to a broker yet, was planning to tomorrow and check that there really isn't anything else out there. I don't know what will happen with my mortgage, have just signed up to two years fixed so don't know if they take the mortgage away from me at the end of that two years or before. It's such a stress!

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PoshPenny · 10/03/2014 22:46

this is interesting. I used to have a flat at the falcons estate by clapham jct. entire estate sold off by local authority in the 1980s to a private developer following riots and God knows what else. sounds very much like what you describe.

My point is... Mortgage lenders tightened up their lending policies before in the 1990s on these concrete sectional buildings and so it was difficult for new buyers to get mortgages on them. As a result, our management company got some very expensive surveys done to prove they were structurally fine and not about to crumble to dust. the next property boom kicked in and no problem lending at all. would expect this is a cycle of behaviour which will keep on going according to the boom or bust of the property market.

I chose to sell in 1999 as the market started to pick up and mortgages became easier to get on the flats, but I had 9 years making an excellent rental from it whilst starting again in a new property in a different part of the country. it might not be what you planned on doing, but can you convert your mortgage on it to BTL and rent it out if the figures add up?

Amethyst24 · 10/03/2014 22:59

Ha, PoshPenny, I used to live in The Falcons too.

This situation seems odd to me. If it is a low-rise block I really don't see the problem. If you are happy living there I would stay. I wonder if your EA has investors looking specifically to buy there and is pulling a fast one?

My DP's flat is in a prefab 60s block and when he discussed putting it on the market the EA said nothing at all about this. It's currently rented out privately with no problems, but when he bought in 2006 he had no problems getting a mortgage.

I'd recommend getting some more advice and having another glass of wine.

Amethyst24 · 10/03/2014 23:02

Besides, mortgages generally were much harder to get 2 years ago than they are now. Also, as far as I am aware even when your current mortgage term is up, the lender can't just pull the rug from under you.

Azquilith · 11/03/2014 08:17

It's a small world because it is a flat in the Falcons PoshPenny and Amethyst! Didn't realise this had happened before, not sure what the management company plans are but will find out. Thanks a log

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PoshPenny · 11/03/2014 16:03

Ha ha that is a truly remarkable coincidence!

Glasshammer · 11/03/2014 23:53

I have a friend who bought and sold a prefab concrete type house in Yorkshire. They had to hunt around for an appropriate mortgage but then had no problem when it came to sell two years later.

I also wonder if the estate agent has vested interest. Can you talk to a broker and ring a couple more estate agents

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