Misled about floor area and now can’t sell?

Misled about floor area and now can’t sell?

11:54 AM, 1st July 2021, About 3 months ago 14

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My daughter is trying to sell her flat which she bought 3 years ago. The new agents have informed her that the floor area is 27sq m, and that it will not be possible for her to proceed to sell to another mortgage holder if it is below the threshold of 30 sq m, they further inform her that she should not have been given a mortgage on this basis.

The EPC states the floor area is 28 sq m, again below the threshold, she is now stuck with a flat she cannot sell except to a cash buyer for a price below market.

What action can she take to recoup any losses incurred given the mis-selling of the flat?

Many thanks

Graeme



Comments

by Neil Patterson

11:59 AM, 1st July 2021, About 3 months ago

Hi Graeme,
Do you have a copy of the original mortgage valuation survey done for the lender? I am surprised this was not picked up at that stage, or did the lender have a lower criteria for minimum floor area? I have seen in the past 25 sq m minimums, but that was many years ago I was involved with BTL finance.

by Graeme Hogg

12:18 PM, 1st July 2021, About 3 months ago

Yes, we have the valuation survey which states the floor area is 30 sq m, measured by ourselves yesterday we calculated it to be just over 27 sq m

by Neil Patterson

13:58 PM, 1st July 2021, About 3 months ago

They may be some recourse with the surveyor in that case as an avenue of investigation.

by Helen

14:37 PM, 1st July 2021, About 3 months ago

I thought it was OK for a one bedroom flat to be below 30 square meters but not a studio flat. I am in that position with a flat bordering on that and I thought if push comes to shove I could put in a partition and make it into a one bedroom flat.

by Ian Cognito

11:20 AM, 2nd July 2021, About 3 months ago

Any chance that your morgage survey measurement was external, whilst selling agent and EPC measurements are internal?

by Derek t

11:36 AM, 2nd July 2021, About 3 months ago

Following this thread as we have a small studio flat bought with a nat west btl mortgage 10 years ago and have recently tried to sell but have had two lenders turn it down how long has this 30sqm been in force ?

by Graeme Hogg

12:07 PM, 2nd July 2021, About 3 months ago

Reply to the comment left by Ian Cognito at 02/07/2021 - 11:20
No it was an internal inspection

by Dylan Morris

12:29 PM, 2nd July 2021, About 3 months ago

Reply to the comment left by Derek t at 02/07/2021 - 11:36I’m sure this minimum internal floor area issue is up to the individual mortgage lender. I’m sue the PRA haven’t regulated it…… yet ! Perhaps a mortgage broker can source a lender who’s happy to lend here ?

by Tim Rogers

12:53 PM, 2nd July 2021, About 3 months ago

Reply to the comment left by at 01/07/2021 - 14:37
I think the SqM for a one bedroom flat is now 37.
That's assuming that the build regs will be taken as the guide by Mortgage companies, which appears to be what happened with studio's.

by Tim Rogers

13:11 PM, 2nd July 2021, About 3 months ago

Well this came as an unpleasant wake up call today. After a deal of internet research and ringing up the professionals I believe the following is the current position. (those who know better feel free to correct me)
1). It's not law/regulated yet, it's the mortgage companies preference. There are about 4 companies that don't apply the 30SqM barrier. As mentioned above they are more inclined if the area is good and properties sell fast.
2). If measurements taken / published / used were false then there is a legal comeback against those responsible, but good luck with that. Particularly if it was the surveyor as there is/was that 20% get out clause. (if something crops up that doesn't effect the price by more than 20%....tough).
3). I'm still trying to bottom out the effects on the valuation for HMRC purposes where the property is reported as a company asset.
4). The likelihood of this becoming law/regulated is debatable as how would you apply it retrospectively to older stock, particularly purpose built.
Am I the only one who feels somewhat shafted through no fault of their own?

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