Unusual mortgage situation advice appreciated?

coose22

Hey guys i don't have too much time atm but i'll try to include everything.

I own a property 50/50 with a family member, no mortgage on it/fully paid. Last year it was on the market for £140,000 but due to unexpected circumstances we had to take it off.

Last week i was granted planning permission to knock down the current onjoining garage and replace it with a 2 story extension that would almost double the size of the house, costing approximately £40-50,000 and i'd estimate taking something like 14 weeks. At which point we intend to rent it out and after looking around i think it could get £900 per month easy. Building it though is where it gets troublesome as we are both currently unemployed, yet needing such a large mortgage, so i'm expecting the options to be limited and probably all based on collateral. So i wanted to hear your opinion on this and what the best options likely are?

You can take a detailed look here these are the current layout and proposed layouts, along with a scaled map of the street to give you some perpective.

You'll need to delete the space between the 2 t's in http to view.

Street View - oi43.tinypic.com/283yux.jpg

Current Layout - oi42.tinypic.com/2a7bzg9.jpg

Proposed Layout - oi40.tinypic.com/mr4q9x.jpg

Thrugelmir

coose22 wrote: »

Building it though is where it gets troublesome as we are both currently unemployed, yet needing such a large mortgage, so i'm expecting the options to be limited and probably all based on collateral. So i wanted to hear your opinion on this and what the best options likely are?

None. No income. No loan.

Why rent the property out as it is or sell it.

hcb42

there are no links
Based on that rental and that amount of borrowing with no income however, I would think you were bonkers. What is the rental in its current (or say current but tidied up state and how does the yield compare with the estimate of £900 on the estimated rental if it was extensively altered?

DVardysShadow

5 beds is a difficult size. Essentially, if you are renting to a family, it will go quite readily but for little more than the rent of a 3 or 4 bed - a family which needs this amount of beds will have serious financial limitations. So you will be left renting it to singles or students and you may well then bump up against the need to register as a HMO [house in multiple occupation] - I believe there is a national criterion but councils can require registration in other circumstances.

And if you come to sell, again 5 beds probably will not make its money back.

I would sell with the benefit of the planning permission, which should pay for itself in terms of increased value to some buyers. But not all.