Mixed use mortgage

Sabbathnut

Is it possible to find a mixed use mortgage? I have found a property that is being sold due to going bankrupt. But 2 high street lenders won't assist because it has multi use. The property has a office/retail space first floor and the 2 floors above are residential. I don't want the shop space but it's catch 22 as I need to buy the property to change the planning permission. Now the building next to it has changed to a house so it won't be in the realms of imposibilities to do. But who do I ask ??

Many thanks in advance

ACG

you wont get a high street mortgage.

You need a commercial mortgage or a bridging loan whilst you split the deeds etc. Commercial mortgage may be the easier of the 2 and give you more time. It will cost more than a residential mortgage and you will also need to put down a 30-35% deposit minimum.

holly_hobby

Firstly speak to your local planning dept to see the likelyhood of getting a change of use (COU) re the commercial element. (if this was previously a resi unit, and as you say other neighbouring units have been successfully changed over, then thats a positive sign)

If agreed in principle, you need to pch the unit to effect the COU, which would be via (due to the commercial element) a semi-commercial mge (if you're are residing above). Although this is a semi-commercial mge, this is not a BTL mge, so max LTV 70% - rates at typically 1-2% above base & high lender fees.

I don't believe splitting of deeds will be necessary here due to the change of use to full resi (nb - splitting of deeds just means that you have 1 commercial element i.e downstairs and 1 resi unit i.e upstairs - this would require the upstairs to be completley self contained, with sep entry, and 2 mges on the 2 separate title deeds - 1 for the downstairs commercial element, and 1 for the upper level resi element - so as you can see this can be complex, costly and probably unnecessary given your current plans).

Just to continue with splitting deeds, this exercise may be useful if post purchase you elect not to reformat the commercial element of the unit to resi accomodation. If this is the case you would split the deeds at the same time as effecting the remortgage of both elements under sep mges (1 x resi mge for upstairs (if a totally self contained unit) & 1 x commercial mge for downstairs). But thats getting a little ahead of ourselves at this point.

Back to the plot, once you're in the property on a commerical mge secured on the FULL unit, then its time for having COU and conversion plans drawn up, and submitted to your local planning officer, and then getting the build up and running (if PP recd). (you must inform your mge lender of the proposed changes to their suriety in relation to the works).

On completion/COU and sign off, you can then seek to remortgage the entire unit from your commerical lending, onto a traditional residential mge - job done.

An experienced commerical broker is where you start with this one - any more guidance give a shout (but this isn't for the faint hearted or those without long pockets, regarding the refurb and planning/build and legal fees ... but I bet it will be lovely when done if you have the right vision !)

Hope this helps

Holly