Can I apply for a standard mortgage?

Stewart_78

I live in a barn conversion. My dad lives next door. When we converted the barn, there was a restriction in the planning that only a person related to the family in the main house could live there full time. If the owner is not related then the property may only be used as a holiday let.

So, the question is, can I just go and apply for a mortgage? I don't want to waste any money and some of the advice I have receieved has been contradictory. I assume the bank will check the planning situation? But I have been told to just go ahead and apply anyway.

For the record, the barn would probably be worth around 400k without the tie. With it, the value has been estimated at 250k and I am looking to borrow £150k against it.

What should I do? I have had some chats about commercial mortgages but the terms seem way worse than the high street. Will I get into trouble for applying for a normal mortgage?

Thanks in advance.

Joe_Bloggs

Can you adopt who ever moves in ? I think this may involve some lawyers either way.
J_B.
Watch out for shepherds and wise men.

DVardysShadow

If the lender understands the situation, then the only mortgageable unit on residential terms would be dad's house and barn together. This is because the only unit which could be sold on the open market as a residential property would be the house and barn together.

Straight away, this puts you in the realm of commercial mortgages, because the barn is only saleable on the open market as a holiday let. You don't even qualify for a BTL mortgage, because you could not take a regular tenant on an AST.

Stewart_78

#3 That's what I understood to be the case but I have been told by 2 independant mortgage advisors to just put in a standard application anyway. Surely they will be aware of the restrictions when they do a search?

ritz55

I would go on the advice of the Independent Financial Advicer. It's likely to be OK as I don't think the lender will check unless you tell them. Would be upto the solicitor to check. Just make sure you use a good Independent advicer who will only charge a fee if the you receive a mortgage offer.

My financial Advicer has over the years managed to make what seemed impossible, possible before now

Conrad

The lender will check. Thier own legal department will ensure this even if you yourself appoint your own lawyer. A quick read of the ddeds / land registry file will reveal all.

The 'advisers' must be desperate, thick or both.

Conrad

Even a commercial lender will be wary and will do a lot of legal pondering on this one.
And if you are living there they wont lend anyway as there is no commercial income. If you say you are to let it then tghe insurance you have must reflect the risk of it being let, but if you burn it down it is highly likely the insurance will be null and void as they will quite easily work out you had'nt let it!

A couple of small private lenders might do this one without you letting it but they will lend only about 60% max of the 90 DAY REPOSSESSION VALUE which thier own surveyor will give. The rate will be between 14 - 20%.
The biggest question hen is what value the surveyor will ascribe to this one as it's an unual one.

Good luck

Let_Us_See

Restrictive Covenants are not so unusual, with perhaps the Agricultural Tie being the most common, and it is normally quite easy to find a lender. However, in your case it is so restrictive that I do not believe you will find a lender to accept the risk. For instance if you defaulted on your mortgage, it would be impossible to re-posses the property and sell it on, as the only possible purchaser would be a family member of the owner of the house!

For easier to consider ways to remove or amend the covenant.