We're tempted to buy a flat above a Post Office but will it be a mortgage headache or hard to sell in the future?

Daily Mail​

a day ago

My husband and I have found a flat we really like. It seems like reasonable value compared to other homes in the area.
However, we have one major concern... the flat is located above a Post Office, which is possibly why it is a little more reasonable than other properties in the area.
The flat itself is leasehold with 188 years on the lease and the service charge is £1,000 per year.
But should we stay clear given that the property is above commercial space? We are worried that a Post Office could change to something else in the future, like a restaurant or takeaway which could be even more disruptive and present a fire risk?
Will it also be possible to get a mortgage on it and could it be difficult to sell in the future?
Ed Magnus of This is Money replies: When it comes to buying a home, often the biggest challenge is compromise - there is likely to always be something that holds buyers back.
The human brain is hardwired to look out for threats and even those who find their perfect home, will likely spend a lot of time pondering over potential pitfalls.
But it's great you have found a property that both you and your husband really like and feel is reasonable value for the area - that's the hard bit to get right.
A 188 year lease is long enough not to worry and the service charge is relatively low, so that's also a positive, albeit you need to find out what the service charge is going towards, and whether it can be increased - and if that increase is capped.
The average annual service charge for a flat in England and Wales was £2,300 in 2024, according to analysis by the estate agent Hamptons - so it's fair to say this is well below the norm.
You are right to question about the flat being located above commercial space, given this has some potential to impact getting a mortgage and the ability to sell in the future.
Given it is a Post Office, it would be worth checking it's opening hours and perhaps spending some time looking at how busy it is during the day - if that concerns you.
In its present form, a Post Office below the flat should not cause an issue on the mortgage front, but as you say, there is the potential for it to change into something else in the future.
For expert advice we spoke to Luke Thorne, associate director at mortgage broker SPF Private Clients, Amy Reynolds, head of sales at Richmond estate agency Antony Roberts.
Will they be able to get a mortgage?
Luke Thorne replies: While most lenders would generally consider lending to someone buying a flat above commercial premises, such as a Post Office, this is always subject to specific review from the bank surveyor.
Some lenders will restrict the loan to value available where a flat is located above commercial premises, so this may mean that a higher deposit is required by any potential buyer.
The type of commercial is particularly important and anything that could be detrimental to the saleability, such as noise, smells and extended opening hours, which for example could be associated with a café, restaurant or fast food outlet, which are likely to be treated more cautiously by the lender.
Having 188 years left on the lease is fine. Lease length becomes a greater concern once the lender can only see say 85 years left at the time of stating the mortgage.
Once that figure is hit, that's when lenders' appetite falls away and fewer options are available.
While we are unaware of the property value and the conditions within the lease, £1,000 would not seem to be too onerous a service charge.
However, this will be commented upon again by the valuer and the lender will incorporate any comments made that could affect the future marketability of the property, into its lending decision.
What the borrower should also ask is if there is any ground rent applicable to this property.
If there is, detail about value and review period should be ascertained as again this may impact the lending options open to the purchaser.
Will they be able to sell in the future?
Amy Reynolds replies: You're absolutely right to ask the question – flats above commercial premises do tend to be priced more competitively, and buyers often wonder why.
The answer is that they can be harder to get a mortgage on and that affects the audience we can sell to.
However, Post Offices are generally viewed more favourably by mortgage lenders compared to, say, a takeaway or pub - they're considered low-impact in terms of noise, smells, and foot traffic.
The concerns about what the unit below might become in future are valid. There are rules around change of use, but these rules do change over time.
We sell plenty of properties over commercial and would sell plenty more if lenders would take a different view of the risk.
Provided it's a well-run building, priced sensibly, and in a good area, there will always be a market for it. It's just about going in with your eyes open, which you clearly are.
Could a Post Office branch be changed to a restaurant or takeaway?
Ed Magnus of This is Money replies: You'd hope that the Post Office branch below this flat will continue for a long time to come.
The Post Office has sayid it is committed to maintaining its current level of Post office branches.
That said, nothing is ever certain - and in November last year, The Post Office confirmed it will be axing 115 branches from its 11,500-strong network.
Any future change of use will likely require planning permission from the local authority for someone to change the use from Post Office to a restaurant or takeaway.
A Post Office is categorised as a Class A1 type of commercial property. Restaurants and cafes are an A3, while hot food takeaways are an A5 category.
However, thanks to a recent government rule change to the commercial categories, switching from an A1 class to an A3 class could in some cases now be deemed a permitted development right, which might make it easier for that particular change to happen.
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