Property – what NOT to buy

As mortgage lenders are picky about who they'll lend to, you'll need to do your best to fit their criteria. Specifically, both your affordability and credit rating will have a big impact on the amount you're able to borrow and whether you can even get a mortgage.

Yet there's another consideration you shouldn't ignore...

Lenders are also picky about the type of property they'll lend on. So even if a lender likes you, if it's not keen on the property then this could scupper your mortgage chances.

Lenders tend to only want to lend on properties likely to retain their value. That's because a mortgage is a secured loan, with the property being the lender's 'security'. In other words, lenders have the power to repossess your home if you become unable to repay the mortgage and sell it to recover their money.

Therefore lenders might cap how much they lend on certain properties, meaning you'd need a bigger deposit. Or they might not lend at all if the property is considered really risky.

Try to avoid spending money on solicitors and surveys if a property isn't mortgageable.

If you're home hunting and come across a property that seems under priced, especially compared to similar homes in the area, there is often a reason for it. While it could mean you've found a bargain, it's more likely to be a red flag that there's something keeping the price down – so you should be cautious.

Below we've listed the property types and features that lenders don't always like and are often reluctant to offer a mortgage on, which could be the reason a property seems under priced. We've grouped these into categories, but be aware some properties might be affected by more than one of the issues below:

Short leases and some new builds

• Leases under 80 years in length. Most flats and shared ownership properties are leasehold, so don't think you should automatically avoid anything to do with a lease. But you should be mindful that lenders don't like short leases.
  
  That's because leases become very expensive to extend once they drop below 80 years. You'll find it very hard to get a mortgage on a leasehold home that's got a lease of less than 70 years, and nearly impossible if it's less than 60 years. Lenders might even be cautious about leases less than 85 years, as it's close to the 80-year threshold.
  
  In general, the longer the lease, the better. It's sometimes feasible for a seller to extend a short lease before you buy it – but this would require specialist legal advice, and is likely to add to costs (not to mention it would take time).

• Expensive ground rent. Ground rent is a charge that some leaseholders pay to the freeholder (normally annually). Expensive ground rents – circa £250+ a year – can put lenders off. A lender may require the freeholder to vary the terms of the ground rent.

• Ground rents that double. For example, a ground rent that doubles every 10, 15, 25 or 50 years. A lender may require the freeholder to change the terms of the ground rent before they'll agree to grant a mortgage on the property.

• Uncapped service charges. New-build homes increasingly come with service charges to maintain communal areas (stairwells, lifts, gardens, etc). These can cost £100s, even £1,000s a year, and quite often go up over time. Lenders might have concerns about a property where the service charge can go up by an unlimited amount (ie, no cap).

• New-build homes/shared ownership. Some lenders won't always let you borrow as much if you're buying a new-build home, particularly if it's a flat. And not all lenders lend on shared ownership properties.

• Properties with 'restrictions' in the title deeds. Some properties have restrictions which limit what you, the homeowner, can and can't do – for example, you might not be able to change the driveway, paint the front door a certain colour, or be allowed to extend. Lenders can be hesitant about properties with such restrictions, as they can make it harder for you to sell the property. In recent years, some lenders have been hesitant about properties with section 106 restrictions, for example.

Less desirable properties

• Ex-local authority/social housing. Particularly in blocks where other flats are mainly social housing tenants (our Right to Buy guide has more on buying a council home).

• Studio flats. Particularly if they're less than 35 square metres or not in 'prime' location.

• Cladding. Certain types of cladding can make lenders nervous, like timber or concrete. Cladding that is considered a fire hazard can make a property unmortgageable.

• Homes above commercial premises. Flats above a shop, restaurant or business, etc.

• Petrol stations. Some lenders don't like properties near one.

• High-rise blocks. The definition of 'high rise' varies by lender, but some lenders can be hesitant about flats and apartments in such blocks. This includes new and older high-rises.

• Development plans. If a brand new estate or main road is planned nearby, for example, this may give some lenders the jitters.

Properties with structural concerns

• Uninhabitable properties. Again, the definition of uninhabitable varies by lender, but typically it'll be considered not-fit-for-living if there is no working kitchen or bathroom.

• Non-standard construction. If a property isn't made of traditional bricks and mortar – it's got concrete or glass walls, or a thatched roof, etc – willing lenders may be fewer.

• Flood risks. Lenders are increasingly concerned about the risk of flooding to properties. See our Property search tips guide for more on assessing an area's flood risk.

• Missing planning permission. For example, if a property has had an extension built but not got the relevant planning permission or building regulation approval, you might not get a mortgage on it (until the planning permission/approval has been granted).

• Japanese knotweed. An invasive plant that grows quickly and can cause damage to the structure of a building. Serious presence can make getting a mortgage tough.

You should only buy a risky property after you've carefully weighed up the pros and cons involved and got yourself into a strong position – so consider the tips below.

We're not saying you can't get a mortgage on these types of properties. But securing one will likely require extra legwork before you put in the mortgage application. Remember, you don't want to spend mortgage applications too easily, as each application leaves a mark on your credit file – and too many mortgage applications can be a reason in itself for rejection.

If you think you'd struggle to get a mortgage on a particular property, these tips can help:

✅ Speak with a mortgage broker. Brokers have details of most lenders' acceptance criteria, including the types of properties they will, might and won't lend on – something not usually available to the public. By speaking to a broker, they'll be able to place you with a lender more likely to lend on the property you're looking at.

✅ Consider a specialist lender. There are specialist lenders out there whose niche is lending on riskier properties. Again, a broker can advise which lenders these are. Though be aware these types of lender might charge higher rates of interest.

✅ Save a bigger deposit. A bigger deposit means a smaller mortgage – in other words, less risk for the lender. A lender therefore may be more willing to give you a mortgage on a property it's unsure of if you don't need to borrow as much. Another benefit of a bigger deposit is that your loan-to-value will be smaller, which means you can access cheaper interest rates (meaning you save more money in the long-run).

✅ Haggle hard on property price. The more you can get off the asking price, the less you'll need to borrow from a lender – meaning the more likely you'll be accepted for a mortgage. Tell the seller if you genuinely believe you'd struggle to get a lender to lend on the property. This may strengthen your negotiating position.

✅ Already know who you'd like your lender to be? Ask them directly if they'd lend on that property. For example, if you already know you'd want to apply for a mortgage from HSBC, ask one of their mortgage advisors whether it's likely they'd lend on that property. This might help inform your decision-making.

✅ Rightmove property lending check tool. Rightmove has recently launched a property lending check 'tool' where Nationwide can indicate whether lenders are likely to lend on a particular property. This could be useful if you want confirmation it's possible to get a mortgage on the property. The tool is limited to properties that appear on Rightmove, and you'd need to apply for a mortgage-in-principle through Rightmove to access it.

Before applying for any mortgage, take some time to read our Boost your mortgage chances guide. Where a lender is on the fence about a property, making yourself as attractive a borrower as possible could be the difference between acceptance and rejection.