Within this guide, we cover all the pitfalls that can result in your property becoming non-mortgageable. Sellers make innocent mistakes without knowing that their home cannot be foreclosed on.
So what makes a property non-mortgageable?
- Properties that have been neglected for years as they may not be suitable for human habitation. People can find themselves in this situation when buying a property to reform. Running out of funds or changing circumstances can affect your project.
- Those without kitchens and bathrooms or those that are very outdated are considered unusable.
- Believe it or not, a property with two kitchens. Why? Lenders assume that you could sublease part of the property after you’ve purchased it with a residential mortgage.
- That are valued below £50,000, you will need a reliable cash buyer.
- Apartments or Houses with leases less than 70 years. The landlord has the right to take possession of the property after the lease expires.
- Properties with structural problems, evident by cracks in ceilings and walls. These properties will require foundation and repair work. Such properties remain non-mortgageable and uninsured for five years or more after all the work.
- Subsidence occurs because the soil surrounding the foundation shrinks or swells. This causes the foundations, which support the walls, to move. Evidence of subsidence can be uneven floors, cracks within external walls, and cracks above window openings. Even when fixed subsidence and structural issues are a stigma on a property. You will be required to disclose any of these issues to a buyer.
- Properties that are near mining works, landfill areas, or a history of flooding are not mortgageable.
- Properties with seated tenants or regulated tenancies are not mortgageable. If the tenants moved out before January 15, 1989, you have permanent tenants.
- Properties with a defective lease cannot be mortgaged. An example of a faulty lease is a block of flats and the maintenance of a shared roof is unclear.
- Properties with damp, dry or damp rot, damaged wall ties or floor joists cannot be mortgaged.
- Properties with boundary disputes
- Dangerous or dilapidated buildings
- Illegal extensions without permission from the planning and building control departments of the municipalities
- Properties with non-standard construction, such as precast concrete
- Properties that are next to commercial premises or apartments above takeaways or shops
- Properties within the vicinity of Japanese Knot-weed.
- Properties with free flying domain
- fire damaged properties
- abandoned farm buildings
This is not an exhaustive list. If any of the above apply to you or if you know your property cannot be mortgaged, there are many real estate companies that can buy your property at the best cost.