Nationwide’s decision not to lend on council flats that are more than five storeys high makes no sense at all
Last week my fellow Mortgage Strategy columnist and good friend Jonathan Cornell, head of communications at First Action Finance, rightly questioned Nationwide Building Society’s decision not to lend on flats in local authority blocks of more than five storeys.
This makes no sense and Nationwide simply doesn’t get it.
A property’s mortgageability should be based on its construction, condition and, crucially, its value and saleability.
I can take you to many local authority-built blocks where flats sell readily, and the Barbican development in the City of London immediately springs to mind.
For those who don’t know the Barbican it’s a sprawl of mixed low and high-rise blocks built by the old Greater London Council in the late 1960s.
Flats here sell easily and the higher ones that have outstanding views can fetch more than £1m.
Is Nationwide really saying that it wouldn’t accept a flat in the Barbican as being suitable security for a loan?
Of course, there are numerous council blocks throughout the country which are unmortgageable but this is generally due to their poor location
rather than because they are over five storeys high.
Cheltenham & Gloucester has got it right because it has a general guide that anything in a council block of more than five storeys is unacceptable unless the block can be shown to have a good record with regard to recent sales.
In other words, every case is judged on its merits which is the approach Nationwide should be adopting.
Cheltenham & Gloucester judges every case on its merits which is what Nationwide should do
On another matter, I saw last week that the tented protest village in Parliament Square has been removed on the orders of London mayor Boris Johnson because it is an eyesore in a historic location.
He is right to move the protestors along because if nothing else this so-called village contravenes planning laws, particularly as one of the protestors has lived there for many years.
But isn’t it a pity that there doesn’t seem to be the same will when the great unwashed, romantically dubbed travellers by the media, turn up and dump their bling-laden 30-foot caravans in a field near you?
When this happens councils talk about being powerless to act and not wanting to contravene travellers’ human rights, or some such claptrap.
So what’s the difference? There isn’t one except that Parliament Square is in the middle of a prime tourist town and heaven forbid that the country’s image should be tarnished.
Not fair, methinks. What’s good for the goose should be good for the gander.
Meanwhile, I read with amusement that a Santander surveyor has turned down a house in St Austell for a mortgage due to Japanese knotweed being found in the garden.
In fact, Japanese knotweed is one of life’s great cons, the same as bottled water. Excitable websites will tell you that this evil plant breaks through reinforced concrete blocks with ease, is impossible to eradicate and eats young children.
I had this terrifying blight once in my back garden and will say just one word that should solve all the problems – bleach.