Getting change of use on a pub and a mortgage

sandiep

It took us 5 years to get planning permission on a Grade B listed property in a special conservation area. Every suggestion we put forward was knocked back. Council was obbessive about what wasn't allowed, even though the local register was about 100 years out of date in calling the house a single storey cottage, when it had been extended into a 2 storey house in about the 1910's. And then they dictated that the 1960's single brick (falling down) lorry shed was also a protected building because it was adjacent to the main house.

Don't ever assume with listed properties that you will get a sensible resolution when it comes to planning. Sense doesn't have much involvement in the decision making process. And some local councils are A LOT worse than others. Would be worth finding out how rigidly yours apply the rules.

beeswax_3

Thanks LadyLawyer, your reply has been very helpful.

pinkshoes

Has the vendor ever applied (and been denied) planning permission for change of use?

beeswax_3

pinkshoes - no they have never applied I've spoken to the planning officer so I know this for certain. It has been a pub for at least the last 60 years. It is currently owned by a brewery and is not in private hands, there have only ever been tenants living there.

planning_officer

Is it a rural pub? In any event it's a community facility and in order to change the use you need to convince the council that it is no longer required - that means an immense amount of detail is needed (it is not easy at all!). You will need to produce copies of adverts, prove where it was advertised, for how long, fully justify the asking price, detail how many people requested advertising details, how many people viewed the property, what their concerns were, research the market to compare it to other pubs locally, etc, etc. Having said all that, being on the market for only 6 months is not a good indication at all that it is not needed as a pub. It would really need to be on the market longer than that.

You will also need to show that it is not viable as a pub - ideally you need the trading accounts before it closed to show it was operating at a loss, and you need to show that another operator could not make a success of it, for example increasing dry sales, better marketing, offering B+B etc.

Also, PPS4 (Planning for Sustainable Economic Development) was produced by the Government very recently and this does not help you at all. It includes community facilities within the definition of economic development now (previously economic development was just defined as B Class uses, i.e. offices, industry etc). PPS4 expressly states that before considering a change of use to a residential use, you need to consider other economic development - so not only do you need to prove that it is no longer required for a pub, you need to show that it is not needed for any other community facility, and you also need to convincingly show that it is not suitable for offices or other employment use (before you get to the housing argument). It will also need to have been marketed for commercial purposes for a considerable time to show this.

If I haven't put you off already, it also makes it even more difficult given that it is listed!

I work in a rural district and have been involved with several such applications - invariably they are refused. I was involved with one a couple of years ago where the applicant put together all sorts of information to support his case yet he lost the appeal too, and lo and behold, it's now a thriving village pub under a different (and better!) owner. Just goes to show, a different landlord/tenant/operator can make a very different success of it. Also, one that I'm involved with at present is a small isolated pub in the countryside, where the applicant claimed that nobody used it and it was not viable. We have had around 200 letters of objection to it so far from the local villagers, which makes it virtually impossible for him to argue that it is not required as a pub, and hence as a community facility.

planning_officer

LadyLawyer wrote: »

You need to get hold of a copy of the notice of listing to find out why the property was listed in particular. Try the local authority or English Heritage.

Or try looking at http://www.heritagegateway.org.uk/gateway/ where you can view details of all the listed buildings in the country.

Ian_W

Excellent and very educational post planning_officer. Perhaps explains why the Brewery, given that they're a business and no doubt very experienced at managing their property portfolio haven't applied for change of use.

beeswax wrote:

All I can see is that the value of the property would treble once you had change of use and had revamped the downstairs (for not very much expenditure)

And you think a brewery with extensive commercial property experience can't?

beeswax_3

planning_officer - thanks for your reply. I've already been to the site and sent in the details with my pre-application advice form. The pub is "semi rural", there are three other pubs within 100 yards. I do have a lot more info as reguards the previous tenants accounts, etc. but I won't go into details on a public forum!

Knowing all of these pitfalls - my original query was if anyone could help me to work out how to get a mortgage on such a property. I think LadyLawyer has been very helpful and I now have other some other options to follow up.

sandiep

Is the vendor the brewery?

From my past experience buying a closed down petrol station, it tends to be that you'll need a commercial mortgage to purchase it, then process the change of use, then you can remortgage to a normally more favourable residential rate.

Commercial mortgages at best cover 70% of value so you'll need a hefty deposit. hence the reason that so many pubs have big brewery loans behind them. Also, you may have problems getting a commercial mortgage without a viable business. There is a reason that this has been on the market for so long, properties like this are very hard to finance unless it's cash.

Also from my experience of Grade 2 semi commercial/semi residential property - you are going to need one heck of a lot of money for maintenence. With such properties the money tends to go into keeping the public areas looking smart, and underneath is probably some very old and piecemeal electrical and plumbing work. It's what I would describe as wooly jumper time, you're fine as long as you don't start picking, but once you start........your doomed!

I would invest in a proper structural survey for any listed building. Also remember that repairs may be double what you'd normally pay as the council are likely to dictate the particular materials and products and finishes that you can use. (NB and brace yourself for huge heating bills because grade 2 listed properties don't get to be energy efficient without a huge amount of investment).

eco-friendly_2

planning_officer wrote: »

Is it a rural pub? In any event it's a community facility and in order to change the use you need to convince the council that it is no longer required - that means an immense amount of detail is needed (it is not easy at all!). You will need to produce copies of adverts, prove where it was advertised, for how long, fully justify the asking price, detail how many people requested advertising details, how many people viewed the property, what their concerns were, research the market to compare it to other pubs locally, etc, etc. Having said all that, being on the market for only 6 months is not a good indication at all that it is not needed as a pub. It would really need to be on the market longer than that.

You will also need to show that it is not viable as a pub - ideally you need the trading accounts before it closed to show it was operating at a loss, and you need to show that another operator could not make a success of it, for example increasing dry sales, better marketing, offering B+B etc.

Also, PPS4 (Planning for Sustainable Economic Development) was produced by the Government very recently and this does not help you at all. It includes community facilities within the definition of economic development now (previously economic development was just defined as B Class uses, i.e. offices, industry etc). PPS4 expressly states that before considering a change of use to a residential use, you need to consider other economic development - so not only do you need to prove that it is no longer required for a pub, you need to show that it is not needed for any other community facility, and you also need to convincingly show that it is not suitable for offices or other employment use (before you get to the housing argument). It will also need to have been marketed for commercial purposes for a considerable time to show this.

If I haven't put you off already, it also makes it even more difficult given that it is listed!

I work in a rural district and have been involved with several such applications - invariably they are refused. I was involved with one a couple of years ago where the applicant put together all sorts of information to support his case yet he lost the appeal too, and lo and behold, it's now a thriving village pub under a different (and better!) owner. Just goes to show, a different landlord/tenant/operator can make a very different success of it. Also, one that I'm involved with at present is a small isolated pub in the countryside, where the applicant claimed that nobody used it and it was not viable. We have had around 200 letters of objection to it so far from the local villagers, which makes it virtually impossible for him to argue that it is not required as a pub, and hence as a community facility.

Thanks for that...


It's a shame though, that planners couldn't have applied the same policies in the past to save the destruction of small businesses in most of our towns.