Dawson's Heights mortgage

[HastingsThimble]

Hi, dawsons heights (aka the battleships) seems to have been singled out by lenders as a place they will not provide a mortgage on, especially if you have a 10% deposit.

Does anyone know why this is, whether it is a recent trend and if so when it might change?!

[Pugwash]

These properties were originally owned by Southwark council and went to an ALMO I believe. I do know that lenders have been wary about giving mortgages for ex council flats as I have heard that they are not happy with the soundness of the structures as often neglected in the past. Also if you buy a leasehold ex local authority home you could end up with massive bills as if there are repairs/redecoration/modernisation to the estate, you as a leaseholder will have to pay a share. Sometimes the bills come as high as a mortgage.

[PeckhamRose]

This is all true, Pugwash.

But I still feel it is up to the buyer to make their choices, don't you?

Being a member of LAS2000 helps with ensuring the bills are fair and reasonable. And when paying the price for new and VERY good new double glazed windows, the council give people three years no interest credit. Still, it's a lot of money but when doing the search you should find out if anything is planned in advance by about five years, like new windows for example!

[Jeremy]

PeckhamRose Wrote:

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> But I still feel it is up to the buyer to make their choices, don't you?

After ALL we've heard about greedy bankers, irresponsible lending, etc, etc... you really think this is true?

[peterstorm1985]

Pugwash makes some good points but it may also be that lenders are concerned that when times are hard (now) the authority freeholder may try and delay major repairs as long as possible. This is a serious financial risk to the lender; if the mortgagee defaults the lender wants to be certain he can sell the property to cover his losses. If there are outstanding repairs, with no certainty of completion, the property may not find a buyer.

[Jeremy]

The unfortunate fact is that ex-council flats don't "perform" as well as other properties, whether the market is rising or falling. So lenders have to be careful.

[fluffy]

Dawson's Heights is kept in remarkably good condition, this is possibly due to its listed (or soon to be listed status) as I understand it it is grade 2.

Structurally and superficially huge amounts of cash have been pumped into the estate over the last few years so simply can't understand why anyone wouldn't offer a mortgage, how odd.

[Jeremy]

Like I said - if property prices slump, ex-council places will plummet. So a 10% deposit won't cut the mustard.

[HastingsThimble]

Thanks for the responses everyone. It is very frustrating as I love the block and the flats and it is a shame that first time buyers will struggle to buy there.

Regarding the point about ex-council properties, whilst true they aren't popular with lenders, Dawson's Heights does seem to be treated differently as we have had confirmation that lenders will lend on the Dog Kennel Hill estate with 10% and that was for a higher amount.

Whilst two different brokers said they could not find a single company willing to lend on Dawson's Heights at 10%, one said it may be to do with over-exposure in that block of flats. But surely that could not be the case for all lenders.

[James Barber]

Hi Jeremy,

I was talknig to a very recent buyer of an ex.council flat in a council block in ED. Prices had braodly done the same as no ex. council flats.

He suggeated I look at something called Zeboo or something to see for myself.

[Loz]

I didn't think lenders looked twice at anyone wanting more than an 80% loan-to-value at the moment.

[Siduhe]

I'm sure there was a post on here a while back where an insurer or mortgagor or similar had refused to lend on Dawson Heights properties because they had it listed as a significant subsidence risk. Could be a factor.

[HastingsThimble]

-- moved topic --

[Gimme]

You never hear about greedy people taking irresponsible levels of debt on do you...

Is it really true that so many people were too stupid to see past what the bank was offering and realise that they couldn't afford the loan...?

Just like people blaming teachers for their children being stupid (because "NO WAY could my child be stupid given that they share my genes"), it is much easier to blame bankers for irresponsible lending (because "NO WAY could I have possibly have been so stupid as to have not been able to work out my finances. It must have been a clever scam...").

If the bank won't lend on a property, shouldn't that be a warning sign that maybe you shouldn't be buying that property...

Jeremy Wrote:

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> PeckhamRose Wrote:

> --------------------------------------------------

> -----

> > But I still feel it is up to the buyer to make

> their choices, don't you?

>

> After ALL we've heard about greedy bankers,

> irresponsible lending, etc, etc... you really

> think this is true?

[PeckhamRose]

Fair point, and I agree. Thank you.

Also, when buying, remember they may / probably will sting you for the service charges. LAS2000 is realy good at trying to ensure the Council are held to account for what they charge.

[HastingsThimble]

Gimme the problem was not affordability, the mortgage was agreed they will not even value the property.

I think Siduhe you may well be correct as I know that major work was undertaken to make the land safe to build upon before construction. It would explain why there seems to be a blanket rule across all lenders.

[ClareC]

I don't think Gimme was implying that it was affordability, just that the bank think it's too risky to loan on those flats which is a warning to be taken heed of..... Can you not ask the bank why their underwriters feel the properties are not a good risk? At least if you know the reason you can make an informed decision as to whether you wish to proceed or not.

[womanofdulwich]

i wonder if it is something to do with concrete/asbestos? some large council blocks will eventually need some massive repairs that could cost anything from ?5k to ?20k per flat.if the lenders think the applicant cant afford it they will be left with the bill.

on the othere hand as others have said it could be the subsidence thing.can you look on the land registry website and seehow many flats have sold there and for how much?