Please can anyone help - who do we need to talk to? (business & residential mortgages

dsa1980

I was wondering if anyone could advise us on the best kind of profession to seek out for advice as we have a slightly unusual situation.

My OH and I run a hairdressing salon - he works in the Salon, I am full time employed elsewhere.

We own the building that the salon is in and live in the flat upstairs. The property is currently financed with a commercial loan for the salon space in the name of my husband, and a personal residential mortgage on the flat above in both of our names. This was done as a 'favour' by the bank when we purchased the property as we didn't have a large enough deposit to purchase the whole building on a commercial basis. This is made more complicated by the fact that despite having 2 loans, the property has shared utilities and is just one listing on the land registry (i.e could not be repossessed separately).

We are trying to work out how we can move out of the flat and buy a house (we have an agreement in principle and a deposit for this in my name already to keep the finances separate).

Our initial idea was to turn the flat into salon space which we have planning permission for and architechts plans for the building work, but we would need additional staff to increase the takings to pay for the mortgage and increased business rates. We havent been able to find anyone (apart from staff with no clientele and therefore not able to guarantee us an income).

We have since thought that we should let the flat out but we don;t know how to change the personal mortgage to allow this as in order for us to get a new mortgage in my name, I don;t want to be on the BTL one, but HSBC who we;re with don;t want to give my OH a BTL on his own, and we can;t refinance just the flat with anyone because of the problem of it not officially being a separate dwelling.

Can anyone advise on who we can go to for advice?
Will a commercial finance advisor or a personal financial advisor be able to advise on our whole situation or is there another type of advisor that exists that we can ask?

We're really confused and feel a bit overwhelmed by it all.

Any advice wold be greatly appreciated.

Thanks
Daniele

Savvy_Sue

Couple of thoughts, one positive and one not so ... but neither directly related to the question, I'm afraid!

Rather than straight salon space, have you looked for other practitioners? eg my old hairdresser also used to have a nail bar operating in the salon (which is why I stopped going because I didn't like the smell!!!) and waxing and massage going on upstairs. And my current hairdresser, there's a place just over the road doing massage and waxing and all sorts of other treatments, I go to one and then straight to the other for my next appointment.

But the negative one: have you checked whether you'd need or would get planning permission for change of use from residential flat to salon space?

And second negative, unless you can get separate meters fitted, life might get interesting with the bills! You've got an incentive to keep costs down, a tenant would not have.

Does the flat have a separate entrance?

Actually, the original question, I'd phone a few mortgage brokers and see how they respond. Some of them like a challenge!

dsa1980

HI,

We have planning permission to change the use - as this is the thing we would like to do ideally, however you're right, i'd not thought of looking to let it out to someone else to use - will see what OH thinks of that.

Think my next step will be to speak to a commerical mortgage broker and as you say, see what they advise.

Thank you
Daniele