Unconventional buy-to-let properties 'rule out lenders'
Mortgages for unconventional properties are more difficult to obtain, especially in buy-to-let scenarios which would only target specific tenants, property specialists have claimed.
buy-to-let property broker Finance4 claimed that properties with unusual arrangements, as well as listed buildings, could lead to complications which set back repayments – making a mortgage for the property harder to obtain from lenders.
The group claimed that unconventional properties sometimes scared off lenders, as mortgage payment defaults in the event of problems would mean taking possession of a difficult property to sell and needing to find new buyers.
Steve Collins, director of Finance4, said: "If you were letting to students, and in the bedroom you had a cooker, that would probably rule out 149 of the 150 lenders in this country."
He added, however, that more people were willing to take the risk of a narrower and more focused tenant market, meaning that "more lenders are realising that perhaps they shouldn't be so scared, and are dipping their toe in the water".
While not often used as rental properties, listed buildings were claimed by Finance4 to be more troublesome for lenders, with English Heritage estimating there to be as many as 370,000 listed buildings in the UK.
Published 4th January, 2008
© 2008 Estates IT Limited
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Mortgages for unconventional properties are more difficult to obtain, especially in buy-to-let scenarios which would only target specific tenants, property specialists have claimed.