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Mortgages for High Rise Flats and Buildings

Buying a high rise flat can be an excellent opportunity to buy a property in densely populated areas such as London and other major cities in the UK – however not all mortgage lenders are keen to lend for these properties, some even consider them “high-risk” despite the condition, location or number of storeys.

However there are specialist lenders, and indeed a few high street lenders who will consider mortgage lending for high rise properties, however, it is important to find out what deals are available and what value they offer – as with a limited supply of these mortgage some lenders do charge significant interest rates which people should avoid if possible.

  • Mortgages for high rise flats and buildings
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Why high rise flats are considered higher risk lending

Part of this is the unfortunate image, or legacy, of some of these properties. Many of the first high-rise flats to be sold were 1960s relics, constructed through ageing concrete, likely to suffer from water retention and crumbling. With the crumbling concrete came depreciating property values, and increasingly worried mortgage lenders.

This is a particular concern for lenders because, if a borrower defaults on their mortgage or goes bankrupt, then a lender needs to be able to sell their property on themselves to recoup the loss. The imagery that many lenders see is a damp, costly, and unsellable high-rise flat suddenly appearing under their jurisdiction.

Another issue is that many of these high-rise flats, many of which are former council properties, often are neighboured by flats that are still occupied by council tenants. The perception, often very unfairly, is that these tenants (without a financial stake in the property) will not look after it, and will make selling the owned flat more difficult. This means that the lender is worried that trying to sell the property on, should they need to, might be difficult, and they may effectively be stuck with it. Of course, even if the property is not repossessed, there is always the chance that a future purchaser may face the same hurdles in securing a mortgage.

Finding a lender who will consider high rise mortgage applications

Not all lenders have blanket policies on lending to high-rise flats: some do, but others are willing to assess each application on its merit, and make a decision based on those facts. There are general things that one can do, which are generally good practice, but which also help persuade lenders to give a mortgage for these types of property: along with having a stable credit history, a larger deposit can help, so less money needs to be borrowed.
How a mortgage broker can help you to secure a high rise mortgage

But, that said, not all lenders take this view. Here at Ascot Mortgages, we understand the difficulties with trying to get a mortgage on a property in a high-rise flat, and we also know lenders who will provide a mortgage for you. But we also know the lenders who will not take advantage of your situation by offering extortionate interest rates or low LTVs. By allowing Ascot to take the difficulty out of hunting for mortgage lenders who will provide a mortgage for this type of property, you can rest assured that we will find you the best lender, at the best rate, with no hassle for you

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*Privacy Notice - Any information provided will be treated with confidentiality and will only be accessible within Ascot Mortgages