Mortgages For Flats – What Is Different?

This blog will focus on residential lending criteria for flats.

Many buyers could be forgiven for thinking that there is no difference when it comes to buying a flat or a house. They both fulfil the same role and as long as the valuation matches the purchase price then it should be straightforward.

Firstly, lenders often will have a different maximum loan-to-value depending if the client is purchasing a house or a flat.

The next factor to consider is whether the property is new build, recently refurbished or standard as this will limit the loan-to-value even further.

There are a number of other issues to be aware of when purchasing a flat.

  1. The number of floors in the block?
  2. What floor is the flat is on?
  3. Is the building serviced by a lift?
  4. Whether the flat was ex-local authority?
  5. Whether the property is converted or purpose built.
  6. All lenders will take into account the additional cost of the lease and maintenance payments in assessing mortgage affordability under the new MMR rules. (Mortgage Market Review).

Studio flats are unacceptable to most lenders due to the difficulty in reselling them in the case of repossession. Some will advance but will have a minimum square footage requirements

Mortgages for flats above commercial premises can be placed however it does depend significantly on what the business is and will be subject to valuer’s comments. Fast Food is usually a decline.

As lending criteria changes frequently please contact us to discuss your individual requirements.

Why Use Neil Soundy Financial Services For Your Mortgage Advice?

  • We are experts in SPV / Ltd Co lending.
  • Your initial consultation is free with no obligation

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How Much Will It Cost Me For Your Advice?

A fee of £495 is payable on completion of the mortgage and Neil Soundy Financial Services Ltd will keep the commission received from the lender for arranging the mortgage.

Neil Soundy Financial Services Ltd is an appointed representative of HL Partnership Ltd which is authorised and regulated by the Financial Services Authority.

We do not give or imply legal or taxation advice. We recommend you contact a solicitor or accountant for advice in these areas.

Think carefully before securing other debts against your home. Your home may be repossessed if you do not keep up repayments on your mortgage.