Mortgages for Houses Near Petrol Stations

If you're interested in buying a property near a petrol station, you might be wondering about the benefits and downsides, or if lenders would even consider mortgages for homes near petrol stations.

Here we'll explore these issues and explain if it's a good idea in the first place.

Can you get a mortgage for a house near a petrol station?

Yes. There will be mortgage lenders available if you are buying a property near a petrol station, and you are only likely to encounter issues if the property is located right next to the petrol station. If it’s merely in the near vicinity, lenders won’t be concerned.

Petrol stations are classed as commercial premises and they fall into the ‘Sui Generis’ category of this property type. Some lenders don’t offer mortgages for houses that are next to this class of commercial property, while others have specific criteria for deals like this.

The good news is that many of the issues you might face buying a property this close to a petrol station can be overcome with the help of a whole-of-market broker, like us.

Lending criteria for homes near ‘Sui Generis’ commercial properties

As previously mentioned, if the property you’re buying isn’t right next to the petrol station, you are unlikely to have to meet any extra lending criteria. If, however, it is next door, some lenders have specific requirements for homes beside ‘Sui Generis’ commercial properties.

The additional requirements are as follows:

• Commercial activity levels: Some lenders may decline if the commercial activity at the garage is likely to cause a nuisance through noise, smell or unsociable hours. This may be a factor if the petrol station is particularly busy or has an on-site shop or other services that attract a lot of footfall or are open for 24 hours.

• LTV caps: A few lenders will cap the LTV at 60-75% for properties bordering a petrol station, meaning you would need at least 25% deposit to get approved.

• Extra valuer scrutiny: Some mortgage providers will only make a lending decision on a home next to a petrol station after subjecting the application to extra checks. They will place more scrutiny on the valuation report, needing it to confirm that the property’s location won’t make it undesirable for potential future buyers.

Should you buy a home near a petrol station?

While there are downsides, there are actually many advantages to buying property near a petrol station too. Homes near petrol station sites are generally cheaper than the average for the local area, which means you could get a decent price.

You'll have easy access to fuel for your car should it ever run low, and within walking distance of a convenience store to grab a snack or other items if you need them.

It's also possible that they could become obsolete in the future as we shift to electric and biogas vehicles that need charging stations instead of petrol pumps. This means there may be fewer refuelling sites around in the future.

Since petrol stations tend to be located on main roads, you'll likely be close to major transport routes, which can cut down on the time and expense of your commute.

Available mortgage lenders

The vast majority of mortgage lenders will consider your application if the property is in the near vicinity of a petrol station, but if it is right next door, you may encounter restrictions.

Below you will you will find examples of the lenders who will offer mortgages near or beside ‘Sui Generis’ commercial properties such as petrol stations:

• Halifax: Will approve mortgages in these circumstances on a case-by-case basis.

• Nationwide: May decline if the property’s location causes nuisance due to noise, smell or unsociable hours, and demand for owner occupation is affected.

• Vida Home Loans: Will cap the LTV at 60-75%.

• Skipton Building Society: Will lend with no caveats subject to a satisfactory valuation report.

For a full list of available lenders, get in touch with one of our brokers below:

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Things to consider

There is a risk of air pollution, possible ground pollution or soil contamination from spills, fumes, highly flammable liquids and the potential for criminal activity.

Depending on the opening hours, other main points for consideration include noise pollution, large vehicles at all hours and bright lights. Opening times can be another major issue, with 24-hour stations being something of an inconvenience for members of the local community.

Anybody considering buying a house next to a petrol station would do well to investigate the area thoroughly, and it's always best to consider all options before committing yourself.

The cost of home insurance

Insurance companies have different views. Since the possibility exists that a spill at a petrol station could cause damage to your property, some insurance companies may charge a higher premium for a home insurance policy on a house near a petrol station.

A significant proportion of all crashes involving cars and lorries occur there, so these types of accidents must also be considered.

In addition, a large number of car thefts occur in these areas, so your insurance premium could go up if you live there.

Some insurers may consider a location for renewals even if they do not charge an additional premium, and these factors won’t be discounted when assessing the risk level of a property.

Potential health risks

Some studies have shown that living near a petrol station can increase a person's exposure to toxic emissions.

According to reports, the air in the vicinity of garages is frequently contaminated with tiny particles from evaporated fuel, which can be harmful to nearby residents.

House prices near service stations

Property prices can sometimes be cheaper if the home you are buying is located near or next to a commercial premises, such as a petrol station.

If you're looking to buy a house near a petrol station, make sure to compare local prices first. This will help you determine if the area is a good investment.

The price of a property will vary depending on the location and other factors, such as local amenities and transport links.

If you're looking to buy a house near a petrol station it's worth considering all the advantages and disadvantages provided above before making your decision.

Keeping your home secure

Crime rates can be higher in areas with many service stations.

People who work at service stations are sometimes more likely to be targeted by criminals, so it's important to keep valuables out of sight and ensure all windows and doors are locked.

Cars parked near a petrol station are easy targets for thieves, so it's important to take extra precautions when you park your car.

Whether or not you should buy property near a service station is ultimately down to personal choice. As long as you're aware of the risks involved and do adequate research, there's no reason why you shouldn't be put off.

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