Mortgage on a residential/commercial property

suejanea

I've just been told by a mortgage broker that no lender will give us a mortgage on the property we want to buy because the front room is a shop and therefore a commercial property as well as a residential one. Does anyone have any experience or advice? I had no idea this was going to present a problem let alone a deal breaker!

Would be really grateful of any advice!

Thrugelmir

You won't be able to obtain a residential mortgage on the property as it will be classified as commercial.

Have you sounded out the possibility and likelihood of being granted a change of use ?

suejanea

The majority of the property is residential, it has three bedrooms, two bathrooms, kitchen, living room and dining room. The front room is currently used as a gallery but we were hoping to use it as a reception room initially with a view to turning it into a shop after a year or so. So therefore we want the flexibility of having this space as either residential/commercial.

The vendors had no problem getting a residential mortgage when they purchased it four years ago. Is this just another symptom of the credit crunch?

Thrugelmir

suejanea wrote: »

The vendors had no problem getting a residential mortgage when they purchased it four years ago. Is this just another symptom of the credit crunch?

Not the credit crunch per se. More a return to proper standards of lending.

suejanea

This particular property has served the small village community for over 100 years and has been a cobblers, a haberdashers, a gallery (twice) and a dressmakers. It has a fine history and is part of a conservation area, converting it to a wholly residential property won't do anything for the community and local commerce will suffer. Furthermore, what happens if you can't get planning permission to convert the property to residential, what chance have the venders of selling their home then?

Thrugelmir

suejanea wrote: »

Furthermore, what happens if you can't get planning permission to convert the property to residential, what chance have the venders of selling their home then?

The vendors may well have obtained a commercial mortgage on the property not a residential one.

suejanea

No, it was residential, they're friends of ours.