Banks are being urged to rethink new lending restrictions which it is feared could put a blight on at least one Isle of Man housing estate.
iomtoday has learned mortgage providers have become unwilling to lend on prefabricated concrete panel bungalows built in the 1970s by Cambar Construction.
There are some 400 to 440 such properties in the island including many on the Friary Park estate in Ballabeg.
Estate agents are warning vendors and potential buyers about the banks’ reluctance to lend – and it could leave owners with homes devalued and difficult to sell and a market for these houses largely restricted to cash buyers.
The new stricter lending policy on Cambar-Mantis homes has only surfaced in the last 12 months.
Surveyors argue that while the bungalows may only have been built for a 30-year design life, there is nothing structurally wrong with them – and banks should treat each property on its individual merits.
Peter Jordan, of Bournville, Birmingham, contacted estate agent DeanWood to arrange to view a property on Friary Park, and was told he would need to be a cash buyer.
He nevertheless commissioned a survey and the resulting report included the line: ‘Most or possibly all of the mortgage lending institutions seem to have decided not to lend on Mantis/Cambar structures, thus their market is limited to ‘cash’ buyers consequently their value/saleability is likely to be significantly decreased.
‘This is likely to remain the case unless such institutions re-think their lending policy on such properties. In turn, this could blight whole developments within which most of the properties are of this construction.’
Mr Jordan said: ‘This situation has potentially very serious implications. This is something of a ticking time bomb. Did the original purchasers of these properties realise that they were “life limited” – and do the majority of the people who currently own/occupy them?’
The two-bedroom bungalow he was interested in first went on the market in August 2012 for £221,950. It is now on sale for offers around £160,000.
Mr Jordan contacted Rushen MHK Laurence Skelly, now Infrastructure Minister, who emailed him saying he had spoken to colleagues and advised him: ‘These houses were built for a certain number of years and they appear to be getting to the end of their expected life. As such, this may be why lenders tend not to want to take a risk on them at this stage.
‘When the “Mantis/Cambar” construction bungalows were built, it is assumed they will have complied with the buildings regulations then in force. As you rightly point out the implications of buying such a property are considerable.’
Mr Jordan had a second survey by a firm specialising in damp issues and timber problems which raised no major concerns.
Mark Mills, in charge of residential sales and valuations at DeanWood, said there was real uncertainty over whether banks would lend on Cambar properties, with some requiring the buyer to stump up a heftier deposit.
He added: ‘This has come to light in the last 12 months in the current financial climate with banks being more cautious.’
Surveyor Andrew Berry said the banks’ reluctance to lend on Cambar properties ‘could put a blight on Friary Park which I think is incredibly unfortunate’.
He said: ‘Surveyors feel they should be treated on their merits. The banks should give these properties a chance.
‘One bank was unwilling to lend on Cambar and some older timber-framed properties. To protect ourselves and our clients we put a warning in our report that some banks are unwilling to lend. Other banks picked up on this.’
Mr Berry said while he had heard of one or two issues mostly related to condensation, he did not believe there were widespread structural problems with the Cambar homes – and he suggested potential buyers with concerns should request a full ‘intrusive’ survey.
Mr Skelly told iomtoday that the construction method of the Cambar properties was reflected in the price. He said: ‘These properties are still selling. To describe it as property blight is overstating it.’
Phil Braidwood MLC spoke to some of the banks after he was approached by one resident who had problems selling their Cambar property.
He said: ‘This construction method wasn’t uncommon on the island. What the banks are saying is that if they lend up to 90-95 per cent of the mortgage and then there is a problem with the property then buyers could be over-extending themselves.’
He said the banks were concerned that the bolts could become corroded and this would only be revealed by an intensive survey.