Section 106 mortgages

[Eatmysocks]

We’re struggling to find a lender who specialises in section 106 discounted houses for local people.

Not the same as shared ownership (but it’s the same criteria) and so far most of the banks have said no.

We actually know people who own these homes with mortgages from Halifax, TSB and Barclays and yet all 3 said they don’t lend on those properties so I’m super confused.

Any brokers or mortgage advisors out there who can help?

I was so happy today and now I feel absolutely crushed by falling in love with an unmortgageable property.

Leeds Building Society might be a good option?

It’s really tough, especially right now when mortgage providers are so risk averse due to Covid.

We found a few providers through our broker that were willing to consider us for a mortgage on a section 106 property and later a section 52, but that was only because we were funding over 50% of the purchase with cash from the sale of our current house so it was deemed less risk to them if they did need to recoup their losses.

Sorry that’s probably not what you want to hear. Depending on the particular tie is there any scope to look at having it removed? The 106 we saw we were fairly confident could be removed (not enough land to be a viable business amongst a few other things) and sure enough a few months later the EA got in touch to say the tie had been removed and the property was now back on the market at a much higher price so it is possible in certain situations.

Oh crap what a mess! We have 25% deposit.

There were a list of “approved lenders” by the Council and none of them have said yes which is so weird.

Also everyone we know who have S106 mortgages are with the banks who say “we don’t do them” - So I’m not sure if they have the right type of mortgage after all?

Why build so many homes that aren’t mortgageable?

@YayoKireZukusi Leeds look like they know what they’re talking about - my final hope.

Have you tried Nationwide? They definitely lend on Low Cost Housing properties, subject to it meeting their criteria (I'm a conveyancing solicitor )

@Jujuball we’ll give them a go (via a broker). The only restrictions are that buyers have to be from the county we’re in.

it’s super stressful.

And now I’ve read that they’re scrapping S106 altogether!

I don’t know if that’s true but it’s another confusing thing to add to the pile

Thanks for your help everyone!