• S157 Restriction Not Listed On Land Reg Docs, So Will It Still Affect My Mortgage?

    By Guest on 06th Jun 2015

    As first time buyers we have just made an offer on an Ex Council property in Dorset that has an s157 Local Living Restriction on it. We have lived in the county for 2.5yrs and plan to make it our principle home so this alone should not be a problem - fixed with a simple application to Magna Housing Association.
    We have, however, found that the Mortgage In Principle for the house is no longer valid with Natwest as they do not lend to buy houses with this restriction. We have also now been told that the amount we will be allowed to borrow may be less as banks see it as a potential issue with resale being restricted to certain people.
    The current seller bought the property privately in 2010. The vendor was aware of it but had not informed the agent directly. The restriction is not listed on the Land Registry documents, and was not listed in the particulars for the sale, or indeed divulged when we specifically asked if there were any restrictions on the property. Having done some research it seems all ex Council Houses in Dorset bar 3 areas are covered by this restriction so surely the agent should have known?
    We have high LTV deposit with offer accepted at £194000 and a cash deposit of £100K. We have one income of £22065 as my partner is just setting up his own business. Natwest offered £95k at 5yr fixed rate of 2.19%, meaning mortgage of £360 pcm for first five years, opposed to the £625 we pay currently in rent. Sounded amazing! We need to have £94k or we cannot afford it.
    We want this house to be our family home, not to resell. Any help or further information on where this leaves us would be greatly appreciated as we are devastated that we may not be able to buy this house.

  • 1 Answers

    By Guest on 08/06/2015

    I'm sorry to hear of your troubles. There is no duty on the seller or estate agent to disclose this type of information, it is for you as the buyer to discover it. They are only liable if they delibarately withhold information or lie when asked. As to getting a mortgage, is there a locally based building society you could try? Or perhaps someone like Penrith Building Society (they have similar restrictions in many parts of Cumbria so they should be familiar with the situation though I've no idea about their lending rates or criteria). Failing that just keep trying lenders. People do mortgage these properties (I've acted for them) so you should find someone

  • Post Your Answer

  • Do you want to be informed of further comments / replies? Yes No

Ask a Question