Does where you live make a difference?
The simple answer is yes
Different lenders lend in different parts of the country. Click here for information about secured lenders or read on for a guide to how where you live affects what you can borrow.
Firstly, it is important to establish where the property is located which is being offered as security. Normally the security address is the borrower’s main residence. However, this is not always the case, for example a person living in France may wish to raise a loan secured on a property which is rented out in the UK. However, once we have established the location of the security address we can look at which lenders are prepared to lend.
London and the Home Counties.
You might expect lenders to favour properties in the south east but this isn’t really the case. Certainly if there is more equity and likelihood of properties increasing in value in a certain area it helps with lending decisions. However for secured loans it is not a policy. An exception to this rule applies to bridging and commercial loans where specialist lenders like to lend on their home turf and like to look at large loans on high value properties.
England and Wales.
With secured lending, the decision about where to lend in the UK is most likely to be dictated by the legal framework and the ease with which lenders can register their security. The legal framework in England and Wales is the same and is comparatively simple. So if a lender is going to lend anywhere this is where they will start. If you live in England or Wales you will have the maximum choice of lenders wanting to do business with you.
The legal system here is different so lenders tend to take their time getting to Scotland – especially the more niche lenders. There is still a good choice of lenders available but some of the newer market entrants will perfect their model south of the border before looking to grow their business in Scotland. The larger well known lenders tend to offer loans in Scotland immediately so don’t be put off.
As you may expect there is no problem with the Isle of Wight or larger islands easily accessible from the mainland. However some lenders are not keen to lend on property on the outlying islands – for example the Outer Hebrides. This could be partly due to a perception of a restricted resale market and the costs of setting up or servicing a loan. Getting a surveyor to fly from the mainland can be prohibitively expensive. Having said this, there are still lenders available so if in doubt, give us a call.
A number of years ago, quite a large number of lenders commenced lending in Northern Ireland. As a consequence of difficulties with the legal system, dropping property values and the credit crunch, all of our lenders withdrew from Northern Ireland. I am pleased to say that some are now offering loans again but I am afraid the range of products is nowhere near as expansive or competitive as the UK mainland.
No Go Areas.
Whilst it is rare, there are occasions where a lender may refuse to lend in a particular street or area. This will be driven by the general sale-ability of properties in the locality. For example if 50% of the street is boarded up, a lender will recognize this as a declining area and therefore the value of the security is also declining. There are exceptions and each application will be judged on its overall merit so if in doubt please talk to us.