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Mortgage Advisor & Director
Mine shafts can pose a significant risk to nearby buildings, and if the property you are looking to buy is close to one, you may worry that this will put off potential mortgage lenders.
Although it’s true that some mortgage providers decline applicants outright if the home they’re purchasing is near a mine, the good news is that there are usually options in this scenario. Read on for a breakdown of what they are and how to choose the right one.
Can you get a mortgage for a house near a mine shaft?
Yes. While the pool of willing mortgage providers is more limited than for a standard property, some lenders will consider an application for homes near mine shafts. They will need assurance that the integrity of the property will not be compromised in the future.
If you’re buying a house near a mine, we recommend engaging an experienced, whole-of-market mortgage broker to not only maximise your chances of approval but also to find you the best deal. Our team of experts have helped countless people to find their perfect mortgage, some of whom were buying properties under complex circumstances like this.
Get started with one of our brokers today, and we promise to make your mortgage journey as stress-free and straightforward as possible.
Speak to an expert about mortgages & mine shafts
Why is it harder to get a mortgage on a home close to mine shaft?
Abandoned mine shafts can cause soil erosion, sinkholes and water contamination in the local area, which clearly poses a risk to nearby residents.
Even if the property has not been affected at the time of your mortgage application, underlying issues are not always apparent, and problems could arise in the future. If the home you're looking to buy is in a coal mining risk area, you can order a mining report from the Coal Authority which will detail the locations of old mines.
The Coal Authority has a duty to cover the costs of property damage caused by being close to a coal or brine mine shaft; however, there are other types of mine that are undocumented.
This means that your mortgage provider may order additional checks and reports to be provided to provide assurance. Your conveyancer will be able to help with this and provide guidance on whether the land is suitable for long term habitation.
Eligibility criteria
In addition to meeting your mortgage provider’s standard lending criteria, applicants who are purchasing a property close to a mine shaft need to meet the following requirements:
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Proximity to the mine: Some mortgage providers won’t lend if the property is within 20-25 metres of an uncapped mineshaft or a mine where the capping status is unknown. Some lenders will also decline if the mine is on the property’s premises.
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Deposit requirements: Some lenders place LTV caps on properties close to mine shafts, so you may need to put down more than the usual 5-10% deposit.
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Satisfactory reports: Many of the available lenders will only offer a mortgage subject to a mining report from the Coal Authority and a satisfactory valuation report. If neither flags up major issues, the provider may lend on a case-by-case basis.
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Buildings insurance: Most lenders will only approve the property for a mortgage if it qualifies for a buildings insurance policy.
Available mortgage lenders
Some mortgage lenders such as TSB, Metro Bank and Swansea Building Society will decline applications outright if the property is located near a mine shaft, but there are plenty of lenders available under these circumstances.
Below you will find examples of the available lenders and some of their criteria:
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Halifax: Will lend subject to environmental reports provided the property is habitable, structurally sound and able to have buildings insurance on it.
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HSBC: Will lend but may apply an LTV cap depending on the valuer’s comments.
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Coventry Building Society: Will consider approving a mortgage for a property near an uncapped mine or one where the nature of the capping is unknown if the property is located more than 20 metres from the mine shaft.
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Nationwide: Will lend with no specific caveats as long as the valuation report and legal checks highlight no deal-breaking issues.
How to get a mortgage on a home close to a mine shaft
Your best chances of securing a mortgage on a home near a mineshaft are by using a competent broker.
They'll be able to recommend the right lenders to approach, and will assist in guiding the necessary paperwork you'll need to get your mortgage. At Teito, our team have helped many people like you to find their perfect mortgage on an unusual property.
Start today by completing our simple online form, and we promise to make your mortgage journey as stress-free and straightforward as possible.
FAQs
Speak to a mortgage broker immediately. The worst thing you can do in this situation is reapply straight away - there’s no guarantee of a better outcome if you choose another lender at random, and having two rejections in succession can damage your credit score.
When you reach out to one of our brokers, they will explore whether there are grounds to renegotiate with the lender who declined you, or failing that, find you a new mortgage provider who takes a more flexible approach to properties near mine shafts.
Choosing an Adviser
Selecting a qualified and experienced mortgage adviser is of great importance. To choose a suitable adviser, evaluate their qualifications, experience, and reputation, and ensure they are regulated by the Financial Conduct Authority (FCA).
Read reviews from previous clients and make sure they provide a clear explanation of the products and services they offer, as well as the fees and charges associated with them.