Buying a B&B with residential Mortgage

pat1cp

I'm looking to buy a B&B but change it back to a house. I need to submit a planning application for this, verbally I've been told it will not be a problem as the property was a residential dwelling until 1998.

Even with the change of use in place the lender is saying they will not fund the transaction because, well, basically they don't believe that I'm just going to use it as a house and will infact continue to rent rooms out, which is most definately not the case.

I'd like to buy the property, I have sold my existing property, does anyone have any suggestions on a way forward please.

Sorry to come begging with my first post.

BitterAndTwisted

Find another lender.

Apply for a BTL mortgage and once you have secured the permission for change of use, then apply to change to a residential mortgage.

jamie11

I had to apply for planning permission for a property before I could buy it, if I hadn't got the pp then I would not have bought it, could you do the reverse and ask for the pp to be withdrawn?

Itismehonest

I think you will have to get the PP for change of use to full residential if the authority will allow it.
That, or if possible use a commercial loan to buy the place & then set about getting things changed.

I'm at the other end of the problem (although not a B&B) & because of planning the only way we can sell is to find a cash buyer as lending on a "house with income" no longer exists. Lenders just won't give mortgages on mixed use properties.

I'd be interested to know what happens if you'd be good enough to keep us informed.

ACG

I dont think you will get a residential mortgage. You will probably need commercial finance or a bridging loan whilst it all goes through.

Dave_the_Ginger_Cat

You are extremely unlikely to get a residential mortgage until the planning is approved and you may also need to make some modifications to the structure before it is granted. So if for example, it has more than one kitckhen, this is likley to have to change.

Take one of the alternate options, and get a remortgage if and when permission granted

pat1cp

ACG wrote: »

I dont think you will get a residential mortgage. You will probably need commercial finance or a bridging loan whilst it all goes through.

Could you tell me how I can get a commercial loan when I have no intention of running it as a business ? Presumably I'd have to put together a business plan, this would show zero revunue.

pat1cp

Dave_the_Ginger_Cat wrote: »

You are extremely unlikely to get a residential mortgage until the planning is approved and you may also need to make some modifications to the structure before it is granted. So if for example, it has more than one kitckhen, this is likley to have to change.

Take one of the alternate options, and get a remortgage if and when permission granted

The property has 7 en-suite bedrooms but only one kitchen. It also has two cottages in the back garden that are currently used as holiday lets.

How can I re-mortgage ?

laidbackgjr

I think unless you are a cash purchaser you will struggle to buy this. What impact on the value of the property will it have by converting it from a b&b back to residential - I would think you would reduce the value a lot if the b&b is a good business.

Itismehonest

If the cottages are part of the purchase then you have no chance of getting a residential mortgage.
This is exactly the sort of property we own (although the house itself has always been residential & never used as a B&B & the cottages not let since retirement 10 years ago) & found this 'no-mortgage' to be the case when we put it on the market a couple of years ago. We took it off the market & I have spent the years since trying to find a way out of a totally ridiculous situation.
Unfortunately, most EAs seem to either be unaware or, at least, unwilling to tell owners this. This is probably why so many properties of this type are on the market for years lowering their prices when price is actually not the problem.

Threads on the subject keep popping up. Here's one from early 2012
https://forums.moneysavingexpert.com/discussion/3801749

pat1cp

What a strange situation. The house has been valued on a residential basis. I had an offer in principle for 80k more than my deposit and the balance based on my income alone.

As the lady said in the other thread, why you can't buy something with a let that will supplement your income sounds like a strange scenario, but I don't make the rules.