Following a couple of conversations recently, I thought I would make a post on this.
Occasionally we speak to people looking to purchase a home next to/above/adjacent to some sort of commercial premises. This in itself is not a deal breaker, however some lenders are fussier than others. Most will say it is down to the surveyors comments – but that leaves you paying for a valuation and hoping it is not money down the drain.
As a general rule, most lenders will not lend on properties above/adjacent/next to businesses such as:
Pubs
Take aways
Off licenses
Bookies
Garages (both mechanics and petrol stations),
Cafes
Launderettes
Some will lend if the property is opposite some of those, but not if directly attached.
Why?
Well, off licenses and pubs are more likely to have groups outside. Launderettes and take aways are more likely to burn down. Garages have a lot of noise and air pollution.
It is not to say no lender will lend on any property if they are close by. For example a cafe on the opposite side of the road is more likely to be accepted than if you are buying a flat above a take away.
What can be done? This depends on the customer to some extent. You could take the risk of having a valuation carried out and go from there. However, you may decide you do not want to risk a couple of hundred pounds on a valuation and instead you would prefer to apply to a lender who may be a little more expensive, but is happy for you to send a link to the property from google maps to them to assess before applying.
In 2016, I did a Mortgage for a client who made us aware of a mechanics next door. I informed him that there was a chance it would be rejected once the valuation was carried out. He was happy to proceed as he liked the property and it was priced well.
Unfortunately it was declined because of that, but at least he knew in advance the risks and was happy to proceed.
Some people do question why we charge fees, but this is just one example of where we could have saved the client almost double the fee we charged (Here is another).