Converting a Pub to a House - What to do first?

lostInSpace

Hi guys,

There is a pub for sale in our village that is going to auction in 2 weeks - for a price that looks JUST about what i could get a mortgage for.

It's been to auction 3 times already and not sold - with the price reducing each time. It only closed in jan11. Up until then it had just been a failing pub - selling food, bed and breakfast.

I have no experience in buying property. I have been reading about how a business premises will have VAT and business rates to pay, and will require permission to change use to residential.

What should i do first? Get a viewing of the pub? Try to get a mortgage sorted? Contact the council to see if it's even possible to change to a house? If you wanted to buy before it went to auction -- what would you offer? What reasons would a bank not give a mortgage on a pub? What will the surveyor be looking for?

If 'change of use' was denied -- can a smaller pub be opened, and use more of it for residential - or would it have to remain unchanged? Maybe change to a shop?

Any advice would be great!

I know this could be a lot of work - and have no experience, but the price really is amazing - and would be impossible for me to buy a property this big any other way. Even if it means opening a smaller pub


Thanks for reading this long post. Cheers. :T

poppysarah

Can you get a business mortgage? That might be your first problem ... I suspect a residential mortgage isn't going to cut it.


I think you can apply for change of use after trying to let the place for so many months (not sure if that applies only to shops, or whether it even varies by council etc)

maninthestreet

Have you costed the conversion of the pub to a residence??

lostInSpace

maninthestreet wrote: »

Have you costed the conversion of the pub to a residence??

Because it's only two weeks to the auction - I've been more looking into if it's possible.

As it would be a house for me and my family - i wouldn't mind doing it up over time, as each pay cheque came in - so I'm not too worried about the budget. It really would be a dream home with the size of it, and the grounds.

poppysarah - I'm not sure if i could get a business mortgage yet That's why i haven't phoned to view it or anything - as i don't know if i'd just be wasting the estate agents time if i cannot get the mortgage.

I do work self employed - with a few years of books, so i may be able to get a mortgage - i didnt know if this should be the first step to find out.

Thanks for the replies guys.

Annisele

Have a word with your local planning department. It's possible there's already been an application for a change of use and it's been refused.

One of your problems is that you're not going to get planning permission in the next two weeks. If this is at the top of your budget, then buying it without planning permission would be daft - what would you do if it was refused?

Buying an auction property with a mortgage is a dangerous game anyway. Before you bid, you need to make sure that you can actually get a mortgage on that property - which involves expense.

Zogger

What would you actually be buying? the freehold? I thought pubs etc. were often sold on short leases and hence cost less at the start. (Don't know much about this subject myself)

lostInSpace

Annisele wrote: »

Have a word with your local planning department. It's possible there's already been an application for a change of use and it's been refused.

Ok - i've phoned council - who say there is no problem in change of use - they would rather have it in use as a house, then a boarded up pub.

Obviously i'd need to put in an application to make it offical - but it's a good sign they didnt say no outright. I think it may be possible, because for the last 5 years it's just swapped owners and never worked as a pub.

I've just phoned for a viewing now :eek:


Zogger -- it's a freehold

Cheers for the help guys.

PasturesNew

Zogger wrote: »

What would you actually be buying? the freehold? I thought pubs etc. were often sold on short leases and hence cost less at the start. (Don't know much about this subject myself)

I was about to query this too.

Usually pubs look very cheap because you're not buying the pub, but buying the lease to run the pub.

Looks like that's been covered/answered though.

SlopingBird

lostInSpace wrote: »

Ok - i've phoned council - who say there is no problem in change of use - they would rather have it in use as a house, then a boarded up pub.

Catti

I have just acted for someone buying a pub to convert to residence. But the planning was already sorted so that was no concern. They did, however, have real problems sorting finance as no ordinary lender would touch it until the conversion was complete. They had to use a private Lender which has proven very costly, and means they are on a tight schedule to complete the essential works before being in a position to remortgage with a mainstream lender.

lostInSpace

Yeah, just spoke to my bank - and they wont touch it. Damn

It feels like this is going to be a massive opportunity lost because i cannot get the mortgage. The size, land etc - it's worth so much more than the £150,000. I've got £45,000 deposit too!

My bank knows my company earns more than £50k profit a year as well -- but because it's a pub and it's a dead business - they would want proof the property could be turned into a house, before they would lend the cash. It wouldn't be possible in the time -- I'd also be doing all the work for the person selling the pub, who could then turn around and sell it for more with planning permission.


Catti - could you please give more info on the person who used the private lender? It would be really helpful.


Thanks again everyone for the help