UK Landlord Forum / Life

Hi, I am in the process of buying an off-plan BTL property via a re-assignment (i.e. I am buying the title to buy from a third party not directly from the builder). I could put down the 10% required to exchange contracts from my own savings but at completion (expected to be December 2015) I will need to have my mortgage in place for roughly 75% of the price I agreed to pay for the re-assignment.

I spoke with my solicitor and he advised me that mortgage providers might not lend me the money when I need to start the mortgage because I did not buy the property directly from the builder.

I tried to contact a number of lenders and a mortgage broker and they told me that they would not lend money before the property has been built, however, when the property has been built, if they consider the valuation of the property satisfactory they would be happy to lend the money.

I am aware of the risks related with buying off plan properties (i.e. the property price goes down, I might end up out of work, banks that might change their policy on lending, etc.) and I am happy with that.

The only issue I can see is if the banks negate me the mortgage because for some reason they do not lend to a new built property that have been reassigned.

I read some posts from 2010 (i.e. around the financial crisis) with people that bought a reassignment in 2006 and when it came to arrange the mortgage they had problems and they could not complete, however I am not sure if it was because the property prices fell during that time and the banks were reluctant to lend or because of the nature of the reassignment itself.

Also I read some posts indicating that "In 2009 property developers were found to have been operating a major scam for many years, probably still true. They would sell the first few properties 'off plan' to their buddies at artificially inflated prices and then use these 'sales' to value the rest of the units. Once everything was sold, the scam sale units would go back onto the market at fire sale prices causing a collapse in valuations everywhere in the development."

I would like to know if there is somebody that has some sort of experience with these types of situations and what's their advice.

Thank you