DERBYSHIRE, July 5 — A young couple came within days of losing their new home after their mortgage lender withdrew its offer, citing concerns over the property’s service charge and ground rent. Sophie Elwright, 29, and her husband, Jordan, also 29, had rented a two-bedroom, top-floor flat in Derbyshire for four years. When their landlord decided to sell in 2024, the couple felt his asking price was too high.
Fortune appeared to smile on them. They snapped up an identical flat in the building next door for £119,000, and their offer was accepted in February 2024.
A mortgage offer arrived in March. Then, in May, it was withdrawn. The lender had a specific concern.
It looked at the flat’s service charge and ground rent — £1,770.12 and £200 a year, respectively — and decided those costs were “too onerous.” The lender’s policy required such charges to remain under 1 per cent of the value of the property. “Even though all the accurate figures had been provided from the outset in our application, the mortgage offer was withdrawn months later in May,” Sophie, an IT helpdesk analyst, said.
“The lender said the property could not be considered acceptable or suitable to provide a mortgage for.” The timing was brutal. The news came just two days before the date the parties involved had agreed to exchange contracts, and just over a week away from the completion date. Sophie described feeling “devastated, shocked, confused and completely powerless.” “The bottom had fallen out of our world,” she said.
“We genuinely believed we could have ended up homeless through no fault of our own.” The couple’s mortgage broker did not give up. She “sprung into action,” Sophie said, and started firing off new mortgage applications to other lenders. The encouraging part is that the broker’s quick work appears to have prevented a disaster.
The couple were eventually able to secure an alternative mortgage, though the ordeal left Sophie shaken. For prospective buyers, the case offers a cautionary tale.
Service charges and ground rents, while often overlooked in the excitement of a purchase, can derail a mortgage application if a lender’s internal criteria are not met. Patients — or in this case, homebuyers — should talk to their solicitor and broker early about any potential red flags in a property’s service charge structure. The earlier those figures are stress-tested against lender policies, the less likely a last-minute shock becomes.
