Implications of renting out or selling part of a house.

Big_Zee

Hi,

I'm thinking of purchasing a property which comprises a house with separate converted basement flat. The basement flat has its own front door and no internal access to the main house above.

The basement flat is currently rented out by the current owner on a short term let which will end on purchase.

The freehold to the house and flat is being sold as one property.

My options are: -

1/. Make an access between the flat and the house to make a larger house.
2/. Keep the flat as a place for guests.
3/. Rent out the flat as is currently being done.
4/. Sell the flat.

I will be getting a mortgage on the property.

My question are:

1/. Am I likely to run into any problems getting a mortgage for the property for the initial purchase?

2/. If I were to rent the property will I have any mortgage problems?

3/. If I were to sell the basement flat, what issues with the mortgage will I likely face?

Any help would be really appreciated.

Thanks.

G_M

Big_Zee wrote: »

Hi,

I'm thinking of purchasing a property which comprises a house with separate converted basement flat. The basement flat has its own front door and no internal access to the main house above.

The basement flat is currently rented out by the current owner on a short term let which will end on purchase. :rotfl:Fingers crossed!!!

The freehold to the house and flat is being sold as one property.

My options are: -

1/. Make an access between the flat and the house to make a larger house.
2/. Keep the flat as a place for guests.
3/. Rent out the flat as is currently being done.
4/. Sell the flat.

I will be getting a mortgage on the property.

My question are:

1/. Am I likely to run into any problems getting a mortgage for the property for the initial purchase? I doubt it. It's a single property which you intend to use as your primary residence.

2/. If I were to rent the property will I have any mortgage problems? If you create an AST, which you probobly would, this would contravene your mortgage agreement

3/. If I were to sell the basement flat, what issues with the mortgage will I likely face? You would have o get the lender's permission. Obviously post sale, the value of the remaining property would be les and may not be enough to satisfy the lender. Unless you use the sale proceeds to reduce your mortgage.

Any help would be really appreciated.

Thanks.

Selling would also involve Planning Permission, creation of two leases (I suspect) to ensure the building as a whole is maintained by the freholder (yourself?) on behalf of the two leaseholders (yourself and the flat owner), council tax re-valuing, postal address creation.......

Big_Zee

Thanks G M - very helpful advice.

lincroft1710

Check that the planning permission allows the flat to be sold separately from the main house. Many similar conversions were carried out to provide "granny flats" and the pp conditions were very restrictive.