They said no to the house, not to you.
Your income is fine, your credit file is fine, and the lender still will not do it. When the problem is the building itself, nothing about you needs fixing — and applying again somewhere else can genuinely be the right answer rather than a desperate one.
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- Honest about the property itself
David Bourne
What lenders hesitate over
Anything above or beside commercial premises. A flat over a takeaway, next door to a pub, above a hairdresser. Food, late hours and smells are the usual objections, and lenders vary enormously — some decline the category outright, some ask what the business is, some do not care.
Unadopted roads. If the council has not adopted the road, somebody else is responsible for maintaining it, and the lender wants to know who and on what terms. Common, workable, and a surprise to almost everybody it happens to.
Non-standard construction. Concrete, steel frame, some timber-frame and timber-clad builds, prefabricated post-war housing. The question is how easily it could be sold again, not whether it is a nice house.
Short leases. As a lease shortens, lenders get twitchy, and there is a point at which most stop. Often solvable by extending the lease, which is a conversation with the seller before exchange rather than after.
Flats with cladding or fire-safety questions, high-rise or deck-access blocks, and ex-local-authority flats in particular all narrow the field, and an EWS1 form can decide it.
The unusual ones: flying freeholds, properties with land or outbuildings, anything with a commercial element, annexes, and homes where Japanese knotweed has been recorded.
Why they care, given you are the one taking the risk
Because the lender's security is the house. If the mortgage were never paid, the loan gets recovered by selling the property — so anything that makes it harder to sell later matters to them now, however happily you would live there. It is not an opinion about the building, it is a view about the queue of buyers behind you.
Which is why the same property genuinely does get a different answer at a different lender. This is one of the areas where policy varies most, and where being turned down by one says the least about what the rest of the market thinks.
What to do next
- Get the exact reason in writing. "The property is unsuitable security" is not enough to act on. Which feature, and on what basis.
- Do not simply apply again. Another lender with the same policy gives the same answer, another search on your file, and another valuation fee.
- Expect to lose the valuation fee. Unwelcome, and worth knowing before you budget for the next attempt.
- Ask whether a bigger deposit changes it. Sometimes it does, because the lender's exposure falls. Sometimes the answer is no at any loan-to-value, and that is worth establishing before you find more money.
And occasionally, the lender has a point
Now and then a property is declined because it is genuinely difficult to sell, and the person it will hurt most is whoever buys it. If I think that, I will say so, even though it costs me the case. A house you cannot get out of is a worse outcome than a house you did not buy.
What people ask about property declines
Will every lender refuse a flat above a shop?
No, and that is the point. It is one of the widest policy differences in the market, and what the business downstairs is often matters.
Does a property decline go on my credit file?
The application and its search do. The reason does not — nothing on your file will say the house was the problem, which is why getting the reason in writing matters.
Can I get the valuation fee back?
Usually not, once the valuer has been out. It is one of the costs of applying to the wrong lender, and the reason to establish policy first.
Would a bigger deposit fix it?
Sometimes. For an outright policy exclusion, no amount of deposit helps, so it is worth asking which of the two you are dealing with.
Tell me what the property is, and I will tell you whether a lender is likely to consider it.
Was it more than one thing?
Most declines have a single trigger, but not all. If any of these sound closer, they are worth a read too.
Declined after an agreement in principle
An AIP is a soft yes from a computer. The real decision comes later, and it is a different test.
Declined after the valuation
Usually about the property rather than you — which changes what fixes it.
Declined because of your credit file
What is on there matters far less than how old it is and how big it was.
Declined over gambling on your statements
Underwriters look at pattern and proportion, not the fact that it appears at all.
Back to all the reasons a mortgage gets declined · How David helps after a mortgage is declined