Tall storeys, sad tales

If you live in a concrete building, you could find it almost impossible to sell, warns Dido Sandler
Concrete is back with a vengeance. As the housing market lifts and homeowners consider selling, many tens of thousands of people may find themselves trapped - unable to sell because no-one will lend money to a buyer of a concrete-built property.

Often pre-fab, often high rises, mostly built between the 1930s and 1960s, many of these properties are the archetypal council monstrosities, but some surprisingly upmarket properties designed by famous architects are also affected.

People who bought from their local council under right-to-buy may not have realised that the lack of something called a PRC certificate will preclude any lender giving a mortgage to a new buyer, effectively making it impossible to sell. The 1984 Defective Premises Act forces owners to get such a certificate to prove the building material is safe from "concrete cancer" - a condition that makes concrete crumble and buildings fall. But according to Malcolm Hollis, Professor of Building Surveying at Reading University and spokesman for the Royal Institute of Chartered Surveyors, while councils may have carried out repairs to secure buildings, you might still not be able to get a PRC. The repairs, although sound, may not be technically acceptable.

To make loans against properties, lenders also need proof that they are not built using higher allumina cement (HAC). This material has decayed in the past, causing buildings to decay and collapse. Not being able to find records of the building materials used can result in lenders refusing mortgages.

Another afflicted and expanding group is people who live in concrete constructions with a PRC certificate and without HAC, but who still cannot sell because mortgage companies will not lend against properties they view as difficult to sell.

Patrick Bunton, manager at London & Country, a mortgage broker in Bath, says owners are finding there is nothing structurally wrong with their property but they are penalised because the housing slump has made their home high-risk as a lending proposition. Most mortgage firms now refuse to make loans on any form of concrete construction. Phil Reed, corporate communications manager of National & Provincial building society, says: "Lenders have tightened up their lending policies, having had their fingers burnt in the late Eighties. They will not lend money where once they may have been prepared to take the risk."

As well as people who live in concrete constructions, those with studio or one-bedroom flats, those above the sixth floor in a high-rise, and those above a shop or in a council housing estate are all encountering problems selling their homes. These types of dwellings lost the most value by proportion in the slump. So long as there is still a relatively cheap supply of more desirable and more saleable residences on the market, lenders are more averse to the higher-risk properties.

Caroline and Edward McBride set their hearts on a flat in a concrete construction block in Bayswater, London, but they had problems trying to get a mortgage. "It's a real pain. We really like the property and architecturally it's very significant," said Mr McBride. (The couple asked us not to use their real names, so as not to jeopardise negotiations with lenders.)

Mr McBride is a director of an advertising company and Mrs McBride is a PA. The flat was designed by Kenneth Frampton, the distinguished architect and architectural writer who is now Professor of Architecture at Columbia University in the US.

Records showed there was no HAC used in construction. Valuers found nothing structurally wrong with the building but, one by one, lenders refused loans. The couple tried Bristol & West, Nationwide and Alliance & Leicester building societies, Abbey National, and several smaller lenders to no avail. National & Provincial building society, shortly to become part of Abbey National, said it would lend against the property, but changed its mind when it found out the McBrides were retaining another mortgage on a property they had been unable to sell.

Mr McBride notes the managing agents were able arrange insurance for the building without any problem. "If the insurers had no problem insuring the property, why won't the lenders lend?" he asked.

The problem has cost the McBrides hundreds of pounds. They found the lending institutions would only come to a decision after they had sent a valuer in, which cost pounds 100-pounds 200 a visit. Finally they approached John Charcol, a mortgage broker in London, which persuaded the Halifax to lend on the flat. "The Halifax saved our lives. They've got a database of buildings and seem to be able to distinguish on an individual basis rather than general rules," Mr McBride said.

Walter Avrili, operations director for John Charcol, said: "The benefit of going through a mortgage broker for non-standard properties is they can save you time and money. They know which lender will do what. You can save the necessary valuations." The downside of using a broker, however, is you will normally have to pay a fee of possibly hundreds of pounds.

A word of caution, though, for people like the McBrides. Even if they do get the mortgage, the resale value may be poor if mortgage lenders continue to shy away from the property. However, sellers of properties despised by lenders but structurally sound may take heart from the continuing recovery in the housing market. The more sustained this is, the more likely lending policies are to loosen in the future.

There is no end in sight, however, for people stuck with former council properties without PRC certificates. The only sale that may be possible is to cash buyers, usually at a heavy discount.