Warning for 1.5 million households as banks REFUSE mortgages over little-known pitfall making flats ‘unsellable’
LENDERS are rejecting mortgage applications for flats located on the fourth storey or higher where there is no lift access, the Sun can reveal.
A number of major banks and building societies told The Sun they will no longer offer mortgages on high rise properties with only stairs in the building as they are becoming undesirable.
Others said they will review applications on a case-by-case basis and may reject them if they deem the lack of lift will make the flat hard to sell.
Estate agent Purplebricks said “millions” of households in England and Wales could be affected based on the latest ONS data.
An estimated 42% of those living in flats are on the fourth storey or higher – around 1.5 million households – and have no lift access in their building.
Experts warn people who own this type of property may have difficulty selling their home in future if prospective buyers can’t secure a mortgage.
And anyone considering buying one of these flats should be aware that they may not be able to get a loan easily.
It comes amid concerns from Local Authorities that the UK’s ageing population is increasingly seeking more accessible housing, making walk-up flats less desirable to buyers.
Experts say this is causing lenders to be more cautious about offering mortgages on these properties.
Jonny Magill, chief sales officer at Purplebricks, said: “Once a flat goes above four floors, it can become tricky to sell if there’s no lift.
“Most lenders would require the building to have a lift, but it all comes down to the individual lender’s appetite for risk and other factors like location and lease length.
“The difficulty in obtaining a mortgage is also likely to impact the home’s value.”
The majority of lenders The Sun looked at limit lending on flats with no lift access to three or four storeys high.
HSBC, one of the UK’s largest lenders, told The Sun it normally won’t lend on flats on the fourth floor or higher without lift access, but said it will consider exceptions where recommended by its valuers.
“Providing a mortgage on a property that would be difficult to sell, and where the homeowner may become locked-in, may be considered inappropriate lending,” a HSBC spokesperson explained.
“As climbing many flights of steps is not an attractive prospect for many, there is not a good demand for high-rise flats without a lift and they often prove difficult to sell.”
A number of building societies including Kent Reliance, Bath Building Society and Chorley Building Society also said they won’t lend on flats above three storeys high without lift access.
Fleet Mortgages, which specialises in buy-to-let mortgages for landlords, also said it won’t lend on flats on the fourth storey or higher without lift access.
Natwest, Coventry Building Society, Leeds Building Society and Virgin Money all said they will not consider lending on flats over four storeys high without a lift.
Santander said no lift access is not a single factor it would use to refuse a mortgage application for a high-rise flat, but it is one factor it considers.
Meanwhile Nationwide, Barclays and Lloyds said they assess applications for this type of flat on a case-by-case basis.
Apartments that can only be accessed by taking the stairs, known as “walk-up” flats, are found throughout the UK, but they tend to be in older buildings rather than new-build developments.
This is because while it’s never been a legal requirement for blocks of flats to have lifts, modern guidelines recommend multi-storey buildings have a minimum of one lift big enough to accommodate a wheelchair.
In a report published in September 2022, the Local Government Association proposed that all mainstream housing must meet the needs of an ageing population, including by providing lift access.
David Hollingworth, associate director at broker L&C Mortgages, said the trend of walk-up flats becoming undesirable is making lenders cautious as they are always planning ahead.
“Lenders want to make sure the property will be good security for their mortgage, allowing them to recover the outstanding balance if they have to repossess and sell the property,” he explained.
“Anything outside the standard could therefore affect the mortgage, including higher rise flats with no lifts, as these may not have the same broader appeal to buyers if there was a need to sell.”
What if I want to buy or sell a walk-up flat?
If you’re looking to buy or sell a high-rise flat with no lift in the building, you may have to jump through more hoops to seal the deal – but all is not lost.
Barclays, Lloyds and Nationwide will look at other elements of the home, such as where it is, when assessing whether to lend on it, so if your home is in a prime location you may be in luck.
Some specialist lenders and building societies have slightly more lax requirements than the biggest lenders.
Skipton Building Society will offer mortgages on flats with no lift up to five storeys high, for example.
If you’re trying to sell a high-rise flat without a lift, estate agents recommend marketing your home based on other aspects of the property that make it desirable.
For example, if it’s in a great location, there is likely to be higher demand than somewhere more remote.
“Lenders may be prepared to consider a good quality property in London, where high rise is more common so the market isn’t likely to be as limited,” Mr Hollingworth said.
Penthouse apartments or flats with a unique feature are also more likely to have buyers who are seeking that kind of property, according to property experts LDN Properties.
And not everyone requires a mortgage – some buyers may be looking to purchase a flat as an investment with their own money. These are known as “cash buyers”.
Cash buyers are often looking for a quick sale, so if you can accommodate that then that could be a way to secure a sale.
Earlier this year, we revealed lenders are refusing mortgage applications on homes where spray foam has been installed in the loft, affecting around 250,000 households.
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