Buying proprty urgent advice please

i4U

Hello All,

I am looking to buy flat/apartment that is described as live/work. The way the estate agent described it, you can use a maximum of 40% of the property to work, i.e. work from home. You can't run a factory or shop. It's normal flats. 60% or more has to be used for living or you can use 100% for living. This is an old warehouse conversion and I have been told that because it's right next to a commercial area, the developers had to get permission, and a small clause was put in that, if the property was to be used for office purposes, it could be, but no more than 40% of the property space. The whole building is flats/apartments, and nearly everybody is using it for residential purposes. I have checked with council tax and the business rates section. The council say they do not have businesses rates for that property as its now been classified as residential.

I have also found a lot of banks are not fully aware of live/work properties.

I have never come across live/work properties before. So any advice etc would really be appreciated as I really like this property.

Thank you all in advance.

socrates

i4U wrote: »

Hello All,

I am looking to buy flat/apartment that is described as live/work. The way the estate agent described it, you can use a maximum of 40% of the property to work, i.e. work from home. You can't run a factory or shop. It's normal flats. 60% or more has to be used for living or you can use 100% for living. This is an old warehouse conversion and I have been told that because it's right next to a commercial area, the developers had to get permission, and a small clause was put in that, if the property was to be used for office purposes, it could be, but no more than 40% of the property space. The whole building is flats/apartments, and nearly everybody is using it for residential purposes. I have checked with council tax and the business rates section. The council say they do not have businesses rates for that property as its now been classified as residential.

I have also found a lot of banks are not fully aware of live/work properties.

I have never come across live/work properties before. So any advice etc would really be appreciated as I really like this property.

Thank you all in advance.

So what is exactly is your question?

zone

Will it be difficult to sell on if you decide to move?

socrates

If its a new build the 'clause' was simply inserted to satisfy the planning permission.

If you can get a mortgage on a new build and you decide to sell it will be exactly the same as any other new build you try and sell on

i4U

Thank you for your replies.

Firstly, I didn't really ask a question. I am trying to pick peoples brains. It's always good to ask other peoples advice or opinion. I may not have thought of something.

It's not a new build. It's an old warehouse that's been converted into flats. I am looking to live there. Mortgages seem to fairly readily available for this type of property. Whereas I have seen it's sometimes quite difficult to get a mortgage above a commercial property.

poppysarah

Got a URL?

planning_officer

Live/work units are usually granted permission in older warehouse-type buildings which would normally be reserved for employment purposes - sometimes the only way a Council will accept the introduction of a residential use is to grant permission for live/work units - they're commonly used for start-up businesses and creative industries - architects, artists etc. They are more common in London, particularly in the east end where there are more older warehouses.

I've dealt with a few in my District - they are normally subject to strict conditions requiring the 'work' elements to be only used for business purposes, and the work parts are tied into the adjoining 'live' parts, so the whole unit (live/work) has to be occupied by the same person/people.

I'm surprised that you say they can be used for wholly residential purposes, and I doubt that's true - you need to check any restrictive conditions on the planning permission. Having said that, they are notoriously difficult to enforce and I'm sure a lot are occupied wholly for residential purposes - but that's normally unauthorised.

You can get a residential mortgage for a live/work unit if the work element does not exceed 40% of the floor area, I believe. When I was doing some research into live/work units, I found the following website very useful -
http://www.liveworknet.com/

One thing your estate agent is very wrong about though, is his/her statement that 'you can work from home' - live/work is a step up from homeworking and is a 'sui generis' use in terms of use classification, i.e. in a use of its own. Residential dwellings are a C3 use - i.e. completely different, and you need planning permission to convert a live/work unit into a dwelling/flat. I would actually suggest that the developer may be wrong about 'no more than 40% can be used for 'work'' - usually the restriction says no less than, say, 40% can be used for 'work'. I would definitely check that out - have a look at the planning permission decision, is it on your Council's website?

i4U

Thank you for a really thorough response.

I have taken a loot at that site before I posted my thread here. It is in London. And you are right it's in East London. I contacted the local council and they have said that no business rates apply to that property any more. I myself have a business so I could make use of it. However, I maybe looking at letting it one day.

I am getting a residential mortgage. If they need me to show a business than I can do that.

However, in the long term, I would possibly look at letting it out one day when I want to leave London. Would that be an issue?

planning_officer

I can't help feeling that you are contacting the wrong dept at the council - it may be that no business rates apply, but that doesn't change any condition on the planning permission - you really need to speak to the planning dept who are the only ones who can advise you what the lawful use of the units is for and if it is a formal live/work development, what the restrictive conditions say in terms of limiting the amount of residential/employment space in each unit.

poppysarah

"VOA postcode" in google gives you the council tax banding and any possible business rating

planning_officer

True, although the most recent VOA ratings lists were compiled in 2005, so they're not fully up to date - so it depends on when this live/work development was converted.

In terms of paying busines rates, it seems that not all live/work units pay business rates, as the OP says in this case - see following extract from liveworkhomes.co.uk:

"Council tax and business rates

This applies equally to people who buy or rent a live/work unit. It makes sense to assume you will pay council tax on the part of your property designated ‘live’ and business rates on the part designated your work area. Business rates are typically a lot higher than council tax, especially in London.
However this rule can be less clear cut if:

• your live/work property is open plan and there is no clear division between work and live. Some live/workers have not been charged business rates in properties like this
• your property has been officially designated ‘live’ by the local council. This has happened to live/work units in some boroughs, even where the work use predominates.

If your work area is (in planning terms) designated B1 chances are you will have to pay business rates on this part of the property."