Hi,
Considering buying a fire-damaged ex-local authority flat in a fairly nice location. Has roof but needs utilities, new kitchen/bathroom etc.

Anyone had experience of the particular problems of this type of property?

Also is it possible to raise a mortgage on a derelict property, or an unsecured loan (about ?45,000)?
Cheers
Albert

Hi Albert,
It's hard enough to raise a mortgage on ex-council places as it is, especially flats/ maisonettes and if the value is low. I have tried on more than one occasion, though I was doing it on a sef-cert basis. In terms of renovation, yes there are lenders who are geared for this but you would need to put up a larger percentage of the value and they may only release funds in stages. They are only limiting their exposure to risk and to reduce it further they may offer a fairly poor interest rate.

If you really want to buy the place it may be better to finance it unconventionally, e.g by releasing equity in your own home or taking out wads of cash on your credit cards. I know investors who do the latter and it works well for them, though they have of course worked hard at getting their credit limits up and the interest rates down. If you can do the work quickly you could then sell the flat and pay off the cards, pocketing the profit. Alternatively you may then find a lender who will offer you a BTL product (at a rate you find acceptable). Your options are much improved with a habitable property. Good luck - would be interested to hear how you get on.
Thanks
Daniel