4th Bedroom - Liveable Space Snag

tommer82

Hi all, long time lurker.

Last Friday I had an offer accepted on a house that was only on for a week as a closed auction at £149,950 oieo. I offered the highest bid (160k) or I was picked because I am a first time buyer. The sellers have already moved into rented accommodation and judging by the state of the house have fallen on hard times and want/still want a quick sales. Mortage wise all things are green light and the processing should be complete very soon.

The Issue

The house was advertised as a 4 bedroom house, the 4th bedroom is attic conversion. The estate agent not only listed it as a 4th bedroom but also told me that there was 'paperwork' for it. After a few days of emails with no reply from the EA I inquired with the local building control and surprise surprise..... no planning had ever been applied for nor any building regs have passed.

The estate agent was a little annoyed that I had bought this up with building control but I'm not really ready to spend 160k on a house and then find I can't rent out the room (though a quick google finds that some people do).

The agents have sent off the forms on behalf of the sellers (at £600) in an effort to get get building control in to approve the room as liveable space however from what I've learnt about regs for attic conversions its got a snowballs chance in hell of passing.

I bought it as a 3 double + 1 single/box room house, stretched myself financially justified by the fact I could rent out the 2 doubles to cover my mortgage..... Now as it stands it's a 2 double + 1 single/box room + posh loft house which would obviously not rent for as much or be worth the 160k price to me.

Anyone have a crystal ball prediction of what may happen? financially its not cost me a penny so far and the mortgage I am having offers the valuation for free so I can't really see myself losing out financially until contracts change.

Thanks in advance.

casperlarue

With no building regs or planning you are looking at a 3 bed house with an attic space that can be used as storage. Are you planning to live there and rent the other rooms out to lodgers or are you renting the whole house out to other people?

I would say that the price is too high and you need to renegotiate based on the fact that the property is a 3 bed not a 4 bed, unless the vendor can supply the relevant certificates.

BitterAndTwisted

My crystal-ball tells me that it won't pass buildings regs and you'll have to pay to have it conform after you've bought it. Not all attic conversions need PP. But something tells me that if you're going to be dependent on renting to lodgers in order to finance the mortgage this won't necessarily be a sensible plan regardless of how many double rooms this place may ultimately have.

You are aware of the tax-implications of taking in lodgers when the income exceeds the Revenue's Rent-A-Room Scheme, aren't you?

tommer82

casperlarue wrote: »

With no building regs or planning you are looking at a 3 bed house with an attic space that can be used as storage. Are you planning to live there and rent the other rooms out to lodgers or are you renting the whole house out to other people?

I would say that the price is too high and you need to renegotiate based on the fact that the property is a 3 bed not a 4 bed, unless the vendor can supply the relevant certificates.

BitterAndTwisted wrote: »

My crystal-ball tells me that it won't pass buildings regs and you'll have to pay to have it conform after you've bought it. Not all attic conversions need PP. But something tells me that if you're going to be dependent on renting to lodgers in order to finance the mortgage this won't necessarily be a sensible plan regardless of how many double rooms this place may ultimately have.

You are aware of the tax-implications of taking in lodgers when the income exceeds the Revenue's Rent-A-Room Scheme, aren't you?

@casperlarue
@BitterAndTwisted

The plan was to live there myself and rent out the 2 doubles and use the single/box as storage, guest room office etc.

@casperlarue

I did think that they might come back to me and ask what I have to offer as 3bed + attic room.

tax implications - yes, i remember reading there are two options but basically you're tax free up to around 4k pa.

I am not relying on my lodgers per say, i could still cover the mortgage etc (mortgage companys don't even take lodgers into account). Basically the mortgage was/is £590pm and the lodgers would be around £300 each pm in my area so seemed like a good plan for myself to cover the mortgage entirely each month and use the saved money for other things.

Yorkie1

Have you double checked whether you're legally bound by your offer given it was made in a type of auction?

Icequeen99

Could you not sleep in the attic room and allow your lodgers to have the 'proper' double bedrooms? Then offer a lower amount based on the fact it isn't a 4 bed.
IQ

Yorkie1

Icequeen99 wrote: »

Could you not sleep in the attic room and allow your lodgers to have the 'proper' double bedrooms? Then offer a lower amount based on the fact it isn't a 4 bed.
IQ

The main difficulty in this sort of case is that unless things were done properly, the structure of the loft may not be safe.

Joists in lofts are not designed to carry significant weight or for being 'lived on'. Without B Reg inspection paperwork or making holes in floors / walls, there is no way of knowing whether the joists have been strengthened. Or whether some of the roof structure has been weakened to create space. Or insulation properly done. Etc.

tommer82

Yorkie1 wrote: »

The main difficulty in this sort of case is that unless things were done properly, the structure of the loft may not be safe.

Joists in lofts are not designed to carry significant weight or for being 'lived on'. Without B Reg inspection paperwork or making holes in floors / walls, there is no way of knowing whether the joists have been strengthened. Or whether some of the roof structure has been weakened to create space. Or insulation properly done. Etc.

..Thanks. I think that is the issue, it's not like an issue where a lintel needs swapping out, potentially BC might A: request its all removed or B: suggest how it can be brought up to regs which might make it as expensive as a regular attic conversion Ideal scenario would be something like, change insulation and add a firedoor + links smoke alarms... but I really doubt it., call me glass half empty.

Do you know anything about retrospective planning? I saw on a couple forums you get planning granted on the basis of when the conversion was put in place the regs were different. Seems unlikely to me, otherwise people would be getting things like asbestos signed off

Yorkie1 wrote: »

Have you double checked whether you're legally bound by your offer given it was made in a type of auction?

its a regular offer, its not like a regular auction. Thankfully. We have really just got to the offer stage, solicitors etc are not yet invloved.

Icequeen99 wrote: »

Could you not sleep in the attic room and allow your lodgers to have the 'proper' double bedrooms? Then offer a lower amount based on the fact it isn't a 4 bed.
IQ

I did think of that actually. I did think I could sleep in there, perhaps wire some battery back up mains alarms and add a fire door. Not ideal, but I get the place at a lower price it could tide me over till I get the attic overhauled.

girl_withno_name

tommer82 wrote: »

@casperlarue
@BitterAndTwisted

The plan was to live there myself and rent out the 2 doubles and use the single/box as storage, guest room office etc.

@casperlarue

I did think that they might come back to me and ask what I have to offer as 3bed + attic room.

tax implications - yes, i remember reading there are two options but basically you're tax free up to around 4k pa.

I am not relying on my lodgers per say, i could still cover the mortgage etc (mortgage companys don't even take lodgers into account). Basically the mortgage was/is £590pm and the lodgers would be around £300 each pm in my area so seemed like a good plan for myself to cover the mortgage entirely each month and use the saved money for other things.

Just to note that two lodgers at £300 each pm would give £7200pa which is obviously above the £4,250 you can receive a year tax-free.

tommer82

girl_withno_name wrote: »

Just to note that two lodgers at £300 each pm would give £7200pa which is obviously above the £4,250 you can receive a year tax-free.

yeah, sure is

DVardysShadow

tommer82 wrote: »

The estate agent was a little annoyed that I had bought this up with building control but I'm not really ready to spend 160k on a house and then find I can't rent out the room (though a quick google finds that some people do).

Although it is not the EA's place to get upset, you have made a bit of a mistake here which has implications reaching further than your offer.

One possible way of addressing the issue of lack of BR approval is indemnity insurance. You have certainly made that impossible for yourself by approaching the council. What I am not sure of is whether you have ruled that out for all potential buyers of the property - but at the very least, by telling the agent, you have compromised his position because in telling him, you have also in effect, told the seller, which might leave the seller unable to get indemnity insurance.

When you do your research, don't busybody on your own account. Get your solicitor to deal with it. The solicitor will approach the vendor's solicitor and if there is no BR approval, you will find out if only by a lack of response or a suggestion you buy indemnity insurance. Make your choice to accept insurance, to insist on regularisation or to walk away.