Steel Framed properties and Halifax

[Penfold92]

Hi all,

 

I do not know where to post this one, but General Knowledge is as good as starting place as I can think…

 

I have a friend who bought a house 2 years ago. He tried to buy the one he was living in, but because it was Steel framed his Mortgage Broker talked him out of it as there could be problems later on in selling it or even remortgaging it, which in general is very true.

 

Well he found another house and bought it. Two years on it turns out that this house is also steel framed. He claims he never received a copy of the valuation that was done and so was not aware it was steel framed. If he had he would not have bought it. He spoke to his Mortgage Broker who was also shocked as he had told him not to buy that sort of building as well. The broker felt that the Halifax (that was his lender) did not accept steel framed properties two years ago and so wondered if there was a case here to ask the Lender for compensation as he should have been informed of the type of property and if they had noticed they would not have lent on it anyway.

 

Where should he being his enquiries and how? Or is he just stuck now?

 

Any ideas or advice would be appreciated,

 

Penfold

[gyzmo]

refer to the Estate Agents Act and Property Misdescriptions Act. Any malfeance will be contained in those (or regulations made under them).

[jansus]

I am not familiar with steel framed houses or whether that would be obvious to the valluer but there may be a few things to consider here.

 

there is a big difference between a valuation for lending purposes and a survey. It needs to be clarified what was paid for.

 

A copy of the valuation and any comments should also have been sent to his solicitor - who should have advised on any adverse comments.

 

Although a steel frame house may not be obvious on just a valuation( not sure on this point) a valuer should have some local knowledge of this type of property.

 

If the BS has lent with full knowldege of this fact - then presumably it should not be too much of a problem for other lenders..

 

just food for thought

 

 

jan

[Penfold92]

Hi,

 

Actually lenders vary a lot on steel framaed houses and the different types too (there are a few apparently). He paid for a valuation for mortgage purposes, so I guess the main thing is for him to SAR the lender, this should provide information regarding the valuation etc and he could also ask for their lending criteria at that time. Only 2 years ago and at this stage the lender is not being accused of anything.

 

Any other ideas please?

 

Thanks,

 

Penfold

[jansus]

Just another thought - was the buildings insurance arranged through the lender - and are they aware it is steel framed?

 

I dont know whether this would affect the premium or insurance - but what I do know ( having worked for a BS and insurance company) that unfortunately in the event of a claim thay would look for any non- disclosure of material facts - whether or not it affects the claim. therefore if either the solicitor or BS were aware of the construction they should have made your friend aware of the fact - otherwise he may have completed his insurance form incorrectly.

 

So I would definitely approach the solicitor ( they are paid enough!) for clarification of what was known at the time of purchase.

 

Jan:)

[Penfold92]

Hi Jan,

 

Yes I agree that is another point. I think SAR the Halifax to find out what they know then hit them with why they did not notify the client of this major issue which means they would not have insured the property properly. I will need to ask him to look carfully at all paperwork including the sols letters regarding the buildings insurance

 

Thanks,

 

Penfold

[zootscoot]

I'm not sure that a SAR will be useful as this only obliges them to send personal information held on a person. Not details regarding a house valuation. Although I would imagine they would comply with an enquiry for information.

 

I used to own a steel framed property, the only way you could tell was from the steel beams in the loft. Incidentally it was also mortgaged to the Halifax, although the mortgage would have been taken out about 4 years ago. There are some lenders that refuse to lend on steel framed buildings, although they are as robust as traditional built houses.

 

 

When we first purchesed the house it was a repossession owned by the Woolwich. When the valuation revealed that it was a steel framed building they conducted a full structural survey and showed us the pictures of the steel frame which was in perfect condition despite being 40 years old. There were several houses built on the estate in the same way and they had always kept their prices in line with other houses on the estate built in a traditional manner.

 

There are some restrictions on what you can do such as you can not have certain types of cavity wall insulation, but otherwise we did not really see any difference and had no problems selling the property.

 

Valuations for lending purposes are not too thorough, although I would imagine that a look in the loft would be required. The trouble is it is the lender who chooses the type of valuation required. These can range from simple drive by surveys where the valuer does not even enter the property to more in depth valuations. Although lenders do not generally undertake structural surveys that is the responsibility of the purchaser should they wish to have that level of piece of mind.

 

Another problem is that the contract is between the lender and the valuer (although the lender will charge the borrower) the borrower is not privy to the contract and so has no right to sue on the contract. An action in tort law may be available. The case of Smith V Eric Bush established that a surveyer engaged by a lender may owe a duty of care to the purchaser provided the property was of a modest value and it was reasonable to assume that the purchaser would rely upon the valuation. The question as to whether the valuer would be liable is whether another reaonable valuer would have identified the house as being of steel framed. This would ultimately depend on the level of service which the lender had asked for.

[Penfold92]

Hi Zoot,

 

Yes I agree with your point. These is a reason lenders do not like steel framed, but that escapes me at the moment. Also it depends on the loan to value. There are many lenders that will lend, but only to 75% LTV. I will have a think and see what documentation he was given. Then decide from there.

 

Penfold