Developing a maisonette

oscar67

I am thinking of buying a top (first) floor maisonette in small block of four in very desirable Conservation Area in Southampton. The flat needs a lot of improvements: double glazing (planning permission required), central heating, new kitchen, etc. It also has a large loft space which I would want to convert to additional beds / bathroom (probably ending up with 2/3 bed, 1.5 bathrooms). The other three flats have their own gardens, but this one owns the shingle drive and garage area. I also have the option of buying the freehold for legal fees only (which I would need to do to be able to convert the loft). I plan to rent it with a view to living there myself in a few years.

If I budget £10K for refurb and £20K for loft conversion. Does that sound reasonable?

Would I risk over-developing this property?

Thoughts please guys.

Ian_W

Both budgets appear tight IMO, depends how much work you could do yourself. On the refurb I would have thought new kitchen, c/h and d/g would be nearer £15k but it does depend on factors like how many rads/boiler size needed, does d/g have to conform to certain requirements to get PP and how many windows, what spec the kitchen is. Loft Conversion, to be considered habitable space [ie advertised as a bedroom when you sell] will need Building Regs and may well also need PP. Might be an idea to get a couple of specialist co's in for estimates but I would have thought maybe £30K+.

You would risk over-developing. How much reception space does it have? With 2/3 beds you'd perhaps be looking at a family of 3/4 or maybe 2/3 sharers. Does it have enough space for those numbers to live, when they're not in bed? No outside space is probably a turn-off to most families. Local EA's might be a good sounding board - would it add value? The one selling it atm will certainly say yes if s/he thinks it will get a sale, so not them. To be positive getting the freehold at cost is a real bonus.

HTH & BoL.

oscar67

Thanks. I will budget 30K for loft.
I plan to get rid of the existing second bedroom which is accessed off the living room and would be better knocked through resulting in 22'6" x 13' sunny living room.
Perhaps I should explore potential for a roof terrace at the north-facing rear of the property (this would not be allowed at the front due to Cons Area) rather than a third bedroom up there. This would create additional outdoor space, although there is a small balcony at the front already. I expect this would involve additional costs, but would probably result in a better balance to the property.

James

ethank

Good Luck with this, I would shy away from Conversation Areas. You'll be looking at a very expensive windows. It is unlikely that the planning authority will allow you to put upvc in, in a conservation area, youare in keeping with the character of the building and the area.

Don't forget to budget for detailed plans, and structural engineers. It is likely that your neighbours will want to know that the building will support the extra weight.

Most mortgage lenders will not lend on Freehold flats. If you take on the freehold to the property, you may not be able to sell it on as it would require a cash purchase. Some mortgage companies will not even allow the mortgage holder to take the freehold. Check the Council of Mortgage Lenders Handbook at for further info http://www.cml.org.uk/Handbook/FrontPage.aspx

I looked into this a few years ago, but may be an idea to hold the freehold through a limited company?

Good Luck with this

Ethan

oscar67

Thanks Ethan. I have checked the requirements of the planning department. I must replace with similar metal framed units (Crittall) at the front of the property and fit conservation design velux in the loft, again at the front only. Anything goes at the rear of the property.

I have checked, and one of my current choice of lenders will lend, (extract below). I would probably sell on the property as leasehold again and either hold onto the freehold or dispose of it separately:

"Other freehold arrangements

5.5.3 Unless we indicate to the contrary (see part 2), we have no objection to a security which comprises a building converted into not more than four flats where the borrower occupies one of those flats and the borrower or another flat owner also owns the freehold of the building and the other flats are subject to long leases.

5.5.3- Do you lend in these circumstances?

Yes

Market Harborough Building Society Part 2 06/05/2005

5.5.3.1 If the borrower occupying one of the flats also owns the freehold, we will require our security to be:

5.5.3.1.1 the freehold of the whole building subject to the long leases of the other flats; and

5.5.3.1.2 any leasehold interest the borrower will have in the flat the borrower is to occupy."

ethank

Think you are very brave for taking it on. Well done. And good luck!