Listed Property – Tips on mortgaging

Lending For Listed Property It may be a surprise to realise that many buyers don’t realise the property they are looking at acquiring is listed. For those that own property outright who then look to remortgage often only find out about it being listed someway down the line, usually after costs have been incurred. This […]

January 19th, 2019

Lending For Listed Property

It may be a surprise to realise that many buyers don’t realise the property they are looking at acquiring is listed. For those that own property outright who then look to remortgage often only find out about it being listed someway down the line, usually after costs have been incurred.

This happens for many reasons, one of the most common is where a period property has been converted into separate flats. The original building or parts of it are often listed with the owner having paid little attention to it until they either remortgage or apply for planning.

Listed Status

In England there are three primary categories of listed property;

Grade I for buildings of the highest significance
Grade II*
Grade II

Most listed building owners are likely to live in a Grade II building as these make up 92% of all listed buildings.

Listed status means there will be extra control over what changes can be made to the building’s interior and exterior. Listed Building Consent will be required for most types of work that affect the ‘special architectural or historic interest’ of their property.

Why Lenders Have Issues With Listed Property

Part of the reason is due to the issues highlighted above with regard the extra planning issues. The other significant issue surrounds the ability to sell.

When a lender takes possession of a property they are looking at the exit route. In 99% of cases this is sale to a third party. Lenders have concerns over the saleability of listed property, how easy it is to sell, how the restrictions limit the number of buyers and whether maintenance is required during the period between repossession and sale.

As a result most lenders will have a policy concerning listed property, in most cases this is along the lines of;

Grade I – Little or no appetite to lend
Grade II* – More limited pool of lenders who will look at on a case by case basis
Grade II – More lenders in this bracket although the valuer comments will have a bigger impact on the mortgage approval

The worst case is when a mortgage application is progressed, legals and surveys undertaken only for the listed status to come to light and the lender decline.

Best Practice

When it comes to either buying new property or remortgaging then there are a few key things to do at the outset which can save time and money later on.

Check the property register. Historic England has a register you can search which will show what property and what parts of any property are listed, along with the relevant parts and restrictions. This is free to use and provides the information you need at the very outset
Check the lender policy. If you are applying for a mortgage and know your property is in some way listed then check with the lender as to what their policy is. If you can supply details of what the listed elements are then they can normally let you know what they will and will not lend for. There is normally always an option somewhere

In short, check the register, check the lender policy and do both at the outset, before you pay for any legal work or surveyor fees.

Any questions or if you are struggling to find a lender that will work with the property you have then get in touch.

By Dave Farmer

David Farmer

Over 30 years finance experience. Former credit underwriter, founder of Lime Finance Solutions in 2012. Multi Award winning business, featured in Sunday Telegraph, Parliamentary Review, Sky TV and others. Regular contributor to press and business associations. FCA Authorised, ALIBF Qualified. Specialist in Commercial Mortgages, Business Lending, Property and Development Finance.