Dulwich estate properties ?un-mortgageable??!

[localyocal]

We just got declined for a mortgage in Dulwich Village by Barclays - we passed financially but the house value came back as ?0 and we got told the whole Dulwich Estate has been blacklisted and no mortgages will be granted by Barclays, Santander or Nationwide because of the restrictive terms of the Dulwich Estate rules. The rules says that the estate can take first charge over the property for any amounts owed to the estate and so the banks deem them un-mortgageable.

Has anyone else heard of this? Obviously this could have a big impact on sales and the-mortgages in the area. Interested to hear any other experiences.

[womanofdulwich]

Bizarre.the charge would be for unpaid scheme of management fees?

[SpringTime]

Who told you that the Estate properties are unmortgageable where these lenders are concerned? Sorry I can't believe this at all.

I thought the vast majority of houses on the Estate were freehold and subject to the scheme of management:

http://www.dulwichestate.co.uk/som/

Is is the case that the property in question here is a leasehold?

[chuff]

Is it a house the Dulwich Estate currently own or just a house within the Estate boundary?

It doesn't really make sense to me either way but people have definitely bought and sold within the boundary recently so it could be an issue with that particular property or with estate owned properties.

The fees charged to live within the Estate boundary are only a few hundred pounds a year so even if a charge were to be top of the list, I can't imagine it would have much bearing on the mortgage amount.

I've just remortgaged with Scottish Widows on my house within the boundaries and there weren't any issues.

[JohnL]

womanofdulwich Wrote:

-------------------------------------------------------

> Bizarre.the charge would be for unpaid scheme of

> management fees?

http://www.dulwichestate.co.uk/som/scheme-document#clause16a

Point 11 in the scheme of management even mentions Barclays as the standard for interest rates.

[localyocal]

It was for a freehold property on pickwick road and I was told it directly by Barclays. I agree it is surprising - was wondering if others had similar experiences.

[mybaby178]

Our property is within the Dulwich estate and had no problem getting a mortgage with Halifax

[womanofdulwich]

What are the vendors sicitors saying???

[Mick Mac]

localyocal Wrote:

-------------------------------------------------------

The rules says

> that the estate can take first charge over the

> property for any amounts owed to the estate and so

> the banks deem them un-mortgageable.

>

Most mortgage companies wont be willing to take a second charge. Perhaps they have only recently been made aware of the estate charge (or are only now taking it seriously/literaly) and are playing hardball until they change it.

[redpost]

Banks lend on leasehold, and your lease is forfeit if you don't pay your ground rent or service charge - so, I don't see how Dulwich Estate properties are any different. Unless, there are some other restrictions in the covenant they don't like.

[womanofdulwich]

Banks lend to freeholds and leasehold.

[apbremer]

This must be a spoof. Silly season.

[Carrie]

If the Estate charge is unpaid the Estate do have a right to register a charge against the property but it would rank below any mortgage currently registered on the property so this is a complete overreaction by the lender whose security in the Property would be unaffected by any charge registered by the Estate. I have also had a case where clients had to change lenders due to this misunderstanding of the situation, very frustrating!

[intexasatthe moment]

That's a clear and helpful post Carrie .

On a pedantic point ,shouldn't this thread be in the Lounge ?

[Mick Mac]

No. Its Dulwich relevant. Some Se22 properties are within the DE boundary.

[intexasatthe moment]

Fair enough ,thought this section was East Dulwich specific .

[Abe_froeman]

Presumably even a second charge that ranked behind the banks would still stop the bank from repossessing the property and selling it. That would be a big problem for some banks surely?

[Sally Eva]

https://www.moneyadviceservice.org.uk/en/articles/second-charge-or-second-mortgages

The risks and alternatives

As a second charge mortgage works very much like your first mortgage, your home is at risk if you don?t keep up the payments.

If you sell your home, the first charge mortgage gets cleared in full before any money goes towards paying off the second charge although the second charge lender can pursue you for the shortfall

[Carrie]

Similarly the owner of a second charge can also repossess but they have to pay off the first charge first before they can use any money to pay off their own charge. The existence of a second charge does not prejudice the security of the first lender which is why Barclays stance is so stupid!

Realistically Dulwich Estate would be highly unlikely to ever try to repossess a Property, they register a charge to ensure that they will eventually get the money that they are owed when the property is sold or the owner of the property remortgages.

[char1i3]

Just go to a different lender. Halifax or Natwest.

[localyocal]

Update - after some back and forth between the Dulwich estate and Barclays, the mortgage offer finally got issued. Seems the issue is solved with that lender. A good result.