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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.

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?

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.

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 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.

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!

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

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.

  • 4 weeks later...

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