Almas Uddin
Founder and Mortgage Advisor
18 Aug 2023
How Does a Public Footpath Impact My Mortgage Chances?
Buying a property with a public footpath can cause concerns, and be a factor that must be disclosed in any mortgage application.
However, while having a right of way running through your property might be a consideration, it isn't a deal-breaker.
Here we'll explain how public footpaths impact the mortgage application process, and the factors to think about before proceeding with the purchase.
If you require bespoke advice in this situation, or need assistance finding competitive mortgage lending, give us a call on 0330 304 3040, or drop a message to the team at [email protected].
How Do Public Rights of Way Work?
Public footpaths mean that there is a track or path on your property, which is legally accessible by any member of the public, and sometimes includes vehicles such as buggies, bikes or mobility scooters.
In some cases, this can make the mortgage a higher risk to the lender, and so you will usually need to have a slightly higher deposit than usual.
For example, a 5% deposit is normally acceptable for a UK residential property purchase. Some lenders will require 10% if the home has a right of way running across the property.
How Does a Public Footpath Impact my Mortgage Application?
A lot depends on where the footpath is and whether it has any direct impact on the value of the property. Intrusive rights of way can reduce a property valuation by up to 25%, although if you are buying the home that will likely be reflected in the sale price.
For a lender, the concern is that if they had to repossess the property, or you decided to sell it to pay back the mortgage, the home has to be worth enough to cover all of the outstanding mortgage balance, so the valuation process here is vital.
They will consider:
- Limitations on the use of the land around the property, and how that impacts the saleable value.
- Cost implications of having to maintain the right of way and keep it accessible.
- The security risks of trespassing, and additional property costs required for requisite fencing, signing or safety precautions.
- Noise disturbances caused by a busy public footpath on the property.
Provided the mortgage value is comfortably within the valuation, and you can negotiate terms through a whole-of-market lender, it is usually possible to overcome these risk factors.
Expert Advice on Mortgages for Properties with Public Right of Way
While public footpaths aren’t common, they can complicate matters when it comes to taking out a mortgage, due to the increased risk perception of the lender.
If you need mortgage advice for a property with a public footpath, give the Revolution Brokers team a call on 0330 304 3040, or email us at [email protected] for independent advice about the best mortgage products out there for your borrowing requirements.
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