House Unmortgageable

[Housewoes23]

Has this ever happened to anyone else? Is there anything that can be done?

Searches paid for etc solicitor instructed offer accepted, mortgage company has valued it at £0.
I'm so disappointed and frustrated. They have said It's because It's near a paint factory( it is, but the back of it, no deliveries or activities or noise affecting the house at all), near a 24 hour garage, and on a main road.
Very low crime in the area despite the garage anyway. And there are tonnes of houses on main roads!

Also, does this go against full disclosure rules? Surely vendor/agent must have known. Sales have fallen through previously, I've been told.

Has other sales dropped out? If so then you should have been warned but they will say it is lender dependent.

I wouldn't buy it. The stress of selling a house that has issues is very high.

The estate agent for the house we were looking at was very upfront that it wasn’t mortgageable.

It was right next door to the garage (which we also thought would be handy at 10pm when we’ve run out of wine 😂) and the owner of the property on the other side of the garage was interested too but was shocked to find it wasn’t mortgageable as he has a mortgage on his property 100m away 🙄

I thought the asking price was high for a cash only property and was told the owner needs that much to pay off his mortgage. The mortgage he has on his unmortgageable property 🤷🏼‍♀️🤷🏼‍♀️

can I be out there & suggest you ring RICs (surveyors website)& ask their advice?
on another hard to read website they mentioned something about local companies
Has there been a fire at the paint factory -look up news archives?
Ask what mortgage company present owner has
could be like insurance & subsidence you may have to stick to the mortgage company that present owner has

www.mortgagesolutions.co.uk/news/2019/08/28/surveyors-risk-creating-next-wave-of-mortgage-prisoners-through-black-and-white-approach-to-high-rise-cladding/
this is interesting because the point is that it has become more general not just about flats & cladding

Are you really set on this property? Is there a substantial discount on the price for what is effectively a cash only buy?

I wouldn’t buy it. I have a rental property which is a pita and makes a poor return. I would love to sell it but before I do I have to sort out a deed of variation for the lease (ongoing) and still waiting for fire safety certificates for cladding. Have been waiting for over 6 months and still not resolved. It’s entirely out of our control too.

Neither of these were issues when we bought. But until they are resolved the property is effectively unmortgageable.

This is a property with known issues. Why would you willingly buy it? (Unless it is priced for a cash buy).

we used to live near a paint factory (in rented).
there was a fire and we were evacuated and had to stay away for 3 days due to the explosion risk.

That's awful bluefoxmug :(
How far away were you from it? The fact I didn't know this one was there speaks volumes I think, It's not so near at all really.

Thanks mumwon, I'll read that when I finish work. And very good advice, my sister suggested asking their advice too but others (and now posters here) have just said leave it and find something else.

cottipus no not really just disappointed as it was everything I want really. Not ideal being on a main road but no big deal, loved the interior, close to work, very close to family, close to my favourite pub
That does sound a bit of a nightmare for you :(

mustard seems so bliddy stupid doesn't it. I thought the same about this garage
There is a road in between this house and the garage too, it isn't as if It's attached to it and it is a large, supermaket chain garage not a grotty little 'drug-dealy' one.

tech yes according to vendors accout of why it hadn't sold yet. I should have asked why, I was a tad naive really.

.

There are lenders who would consider this (and who probably wouldn't even send a valued out to look at the property if your deposit is greater than 20%). Is your broker whole-of-market? If so, there's likely to be a way round this issue. Can I ask which lender instructed the valuer who said it was unmortgageable?

Lots of land has a nil value - where remediation costs are higher than the value of a uncontaminated version of the site. The cost of remediation has increased as knowledge of the harm the organic petrochemicals can cause has increased and the transmission vectors are better known. 10-15 years ago the land would have been skimmed and capped. Now it is very difficult / expensive to dispose of contaminated soil. This is why properties have mortgages and are now unmortgageable.

I personally wouldn’t buy a property near a paint factory or a garage, and I also wouldn’t buy a property that couldn’t easily be sold on, but that isn’t what you asked. I don’t know how mortgage companies work with their assessments but I’m guessing that they use very basic environmental reports similar to the environmental search that you will have commissioned. Have you seen that l report? It will usually have some sort of risk rating but it won’t have a detailed analysis and it will just be a computer generated response. The obvious risk factors here are the factory and garage but if it’s an industrial area then there may be more past and present, and there may also be factors like flooding. You could commission a more detailed environmental report to analyse the actual risks, or speak to the Location Authority Contaminated Land Officer (Environmental Health) to see if they hold any information on any past incidents at the factory and garage (fires, chemical/fuel spills etc). It may also be that the ‘factory’ is very small scale and doesn’t present a big risk. Without seeing the information it’s hard to tell but with the right information you are likely to find someone who will lend to you.

@Housewoes23 I would definitely try another lender, it probably won't be a problem then. You've either had an overzealous surveyor or a bank who is looking for reasons not to offer you a mortgage (not necessarily because of you personally).

But if you did want to question the surveyor further, I would try to narrow down why that combination of things is unacceptable. The paint factory, for example, will probably be covered under COMAH regulations (Control of Major Accident Hazards). The site will be split into low and high tier if so, depending on the volume of hazardous material stored onsite. Hazardarous covers anything from irritant to flammable to toxic. Ask what tier it is and the mitgations that are in place: if he can't answer, then how can he say it is a problem?

I worked at a high tier COMAH site: which has large quantities of material which is explosive, hazardous to aquatic life, and causes long term health affects (respiratory illnesses, cancer and infertility amongst others). It is situated in the middle of a housing estate in a city, 100m from a nursery and within 1km from both a primary school, secondary school and supermarket with petrol station. I would guess that 95% people locally don't even know it's there. They have to write an extensive report to the HSE each year to the about how they keep the surrounding people / animals safe. The paint factory will do the same.

There is no way that the houses surrounding the site I worked on are unmortgageable.

Apologies, I should have said the paint factory will be classified as high or low tier COMAH (not that it will be split into high or low tier).

Basically they list all the hazardous stuff onsite, add up the amount of it in total and that will give the classification.

I have had this when trying to buy a few places.

One flat was valued at £0 because it had a tree in the garden.

Not a huge tree (about 8ft tall) and about 15ft away from the property.

One place we had a mortgage on a flat we had owned for about 6 months. We came to sell and the potential buyer went with the same mortgage company.
The mortgage company said no as it was too small to be unmortgageable

To be very honest, I think you should just walk away and be very grateful that you’re not the poor sod who’s trying to sell this place.

I had this with one property, surveyor identified movement in the party wall. said it may have been historic but he thought was more recent. Fact that it was party wall meant that any work had to be agreed with both parties and their insurance companies. Rang him up and spoke to him, and he said if it was one of his kids (quite sweet as I was 45 at the time) he'd tell them to walk away because it had potential to be a bloody nightmare. Also valued at £0 until more investigation had been done into movement

I had a house I was purchasing valued at zero due to Japanese knotweed on adjacent land. I walked away although we got shit from the estate agent and seller. I didn't even try another lender, I didn't want somewhere that was going to be hard work to buy and sell. They eventually sold it to some poor soul for full asking price, god knows how.

The last house we sold was valued at zero initially because it didn’t have planning permission

Young guy who they sent round to survey the place really couldn’t get his mind round the fact in the 1600s there was no planning permission and without foundations it was likely to fall down. The thatched roof blew his mind

Buyer sent out a structural surveyor who spent about 10 seconds in the place before declaring it all good.

awasp He's pretty good and experienced and I trust him, and he says It's a no-go although he did say he'd try a few more things. I'll speak to him again tomorrow.
It was VirginMoney.
That's interesting Unescorted.

acat I take your point . I didn't even notice the paint factory, location is perfect for me and I am not bothered about the garage (did think it would prove quite handy as I work a lot and am prone to running out of bits and bats.I guess I'd just rent it out, as current vendor had been doing.

It's close to my family and friends and places to walk my dog, large cellar which I was planning to turn into a mini-gym..main road bothered me a little but nowhere is perfect.

He just sent me VMoney's response and the factors posted in the OP is pretty much all it said. That's interesting though and I will put it to the broker tomorrow, thank you :)

shurl thank you so much for that reply. I wouldn't have had a clue. Again, I will ask the broker tomorrow.

oliversmum A TREE? Bloody 'el. How silly.

seeing yes I guess. :(

hiding that to me does sound more of an issue?

tractor my ex was a gardener and told me the woes of that stuff! Ugh.

Olivers that's fascinating. There must be a fair few places like that!

This has all been very interesting, thank you for the replies all of you.

I'm looking at a few others. I have a large dog and had planned on fencing the front garden as it just has a low wall and I was concerned in case she jumped over it having seen something interesting across the road. So I guess that's not a worry if I find somewhere with a more suitable outdoor space. I am glad I asked this question, lots of food for thought. Gutted about it due to the location though, it was a quick walk to my lovely local, 20 min drive to work, mile or so from family through a scenic route..

But, I guess I thought things had gone a bit too smoothly (for me)

NotYourHolidayDick what happened? Is this why some places only want cash buyers?

I used to know a surveyor

I really felt for those that had him to get their mortgage.

He could find fault in everything and his valuations were so adrift from reality.

He thought that £25000 was the top price for a 4 bed detached and valued properties with that in mind.
At the time in our area 4 bed detached went for £150,000

@ConcreteUnderpants sorry I've just seen your question.

Sale fell through, sold to someone else, went through fine. They just didnt go to Stupid Santander for a mortgage!

Our house was valued at 0 by the lender we had on our existing house because it didn’t have a kitchen. Was so annoying as it had been ripped out by the sellers because it was rubbish and then they hadn’t bothered putting a new one in as they were selling (probate). If they’d left it it would have been fine.

Anyway a broker found us a specialist deal which was more expensive but we got a big reduction on the house price and it was worth it in the end as we love it.

Your issues sound like they could be more significant long term though so I’d really question whether you want the house.