‘Nest egg’ flat dream turns into nightmare

editorial image

A retired couple’s “nest egg” flat has become a “noose around their neck” due to nothing more than its method of construction.

Jimmy and Ruth Hill purchased the three-bedroom council premises at 174 Bowhouse Road, Grangemouth back in 2005 using the Right to Buy legislation and rented it out to a long-term tenant.

The aim was always to sell it on, however, and last year they attempted to do just that.

To their horror they discovered, because the block of flats – built in the 1960s – is classed as a non-traditional construction, mainstream banks and money lenders were not prepared to give potential buyers loans – despite the fact the Halifax gave the Hills a mortgage for it back in 2005.

“We got Purplebricks in and they told us the building is a non-standard construction,” said Ruth (65). “It was the first time we had heard of this. We asked Falkirk Council to investigate and they gave us a very fair reply to what is a very unfair situation.”

Falkirk Council stated: “The Hills purchased the property in 2005 with the help of a mortgage from Halifax plc, who would have insisted on a mortgage valuation being obtained before they made their mortgage offer.

“It would have been expected the surveyors carrying out the valuation report would have raised any concerns they may have had over the construction type at that time.”

Ruth moved into the flat in 1994 with her three children. In 2004 she and Jimmy were married and decided to move to nearby Islay Court, buy the flat and rent it out.

“The tenant was happy there, but he knew the long-term plan was always to sell it,” said Ruth. “It was a happy family home and now it’s become like a noose around our neck. We have done everything we can, but we are caught up in a situation that’s no one’s fault – you couldn’t blame this on any one person.

“We just want to raise awareness about this – we know of at least another 17 people here who have bought their flats and don’t know anything about this.”

The flat currently has an asking price of £55,000, but one firm the couple contacted in their desperation only offered them £20,000 to take it off their hands.

Jimmy (65) said: “We have spent a lot of money and effort on this flat and that was soul destroying to get an offer like that for something we have worked so hard on.”

The Hills tried to get the local authority to buy back the flat, but the council declined, saying it had an oversupply of three bedroom flats and found them difficult to let.

The couple have also considered letting the flat out again, but that would require them to re-register as landlords and they do not want to do that at their time of life.

The situation the Hills currently find themselves in is down to their premises at 174 Bowhouse Road being a “Skarne Cruden” building – a construction style which involves the use of steel frames as part of the structure of the property.

In recent years – from around 2015 onwards – banks and other lending institutions have tightened their lending criteria in relation to buildings which are constructed in a non-standard manner.

The Council of Mortgage Lenders (CML) warns non-traditional construction dwellings may not hold their value in the medium to long term, and as a result may not represent adequate security for a loan.

Properties of non-traditional construction can often be a source of concern for buyers and mortgage lenders alike, as some suffer defects not found in the general housing stock, and might require expensive repairs.

While Skarne Cruden builds are not considered defective in terms of the Housing (Scotland) Act 1987, each lender has its own specific set of requirements, and there are a number of premises not found on any designated defective list – like the Hill’s flat – that are still considered unacceptable for loan security.

The primary concerns when dealing with steel framed dwellings are the potential for corrosion of the frame.