How to finance converting two flats back into one detached house?

holly_hobby

Given the works and merging of titles, yes you would be best if possible to pch the ground floor flat outright.

Stictly speaking you also need the permssion of your current lender for the works, given that their security mid-conversion will be affected, and possibly the value underwhich their security was effected, post conversion (which doesn't always increase when converting 2 units into 1 dwelling), including the issues re title deeds. Which is why conversions like this are typically undertaken on unencumbered properties or funded with commercial finance, by peeps or developers with the independent cash/financial avenues to fund the works until the conversion is complete, and then either sell or remortgage the newly single unit onto a resi mge arranegment. (also works the opposite way when splitting a single dwelling into mulitple units)

Setting that aside, once conversion is completed you simultaneously merge the deeds (will be new title no I suspect) alongside your standard remortgage conveyencing - so that you will end up with 1 dwelling, under 1 title deed with 1 mortgagee. You need to be aware that the dwelling must be easily recognised as a single residential dwelling, which crudely means 1 kitchen area (ie you'll have to remove one of the kitchens, assuming which level you choose as your daily/main living space, which I would choose the lower level to keep it on a traditional layout for possible onward sale), with clear communial family living areas, single entrance and exit points (which as this was originally a house it should have retained), etc, etc .. you get the idea.

Another issue to consider is who holds the freehold ? (presuming as your flat is mortgaged, it is currently leasehold).

Are both flats leasehold, or does the freehold (FH)come with the downstairs flat ? As along with Planning Permission, you'll need to look at this, and if the freehold is held by a 3rd party how many yrs are left (which will impact on any mge application)? And/or will they sell the FH to you, so the single unit becomes completely freehold.

Hope this helps

Holly

Wigglybeezer_2

As is usual in Scotland, both flats are freehold, we own our flat outright and would probably take out a mortgage on it with an LTV of @ 60% to buy downstairs, our flat is more valuable as it has had various improvements done and has off street parking and a garage ( downstairs does not). Reuniting the plumbing and electrics is going to be the tricky bit but will be 0% for VAT so that's good.

We are going to have to find a surveyor willing to give us an estimate of the value of the two flats combined, none of you lot believe me when I say it is going to be worth more! I know it isn't usually the case but I have been following the local market carefully for years and 5 bed 3 reception detached period properties with off street parking are at a premium in this town and are often sold in private sales, usually bought by people moving back up to Scotland from London or out from Edinburgh cashing in on the price differential.

antrobus

Wigglybeezer wrote: »

.....We are going to have to find a surveyor willing to give us an estimate of the value of the two flats combined, none of you lot believe me when I say it is going to be worth more! ....

That's because "it isn't usually the case".:) Normally the reason why a house is converted into flats is because the property is worth more as flats than as a single house. Obviously, things can change.

Besides it doesn't matter what "we" think. What matters is that you can find a surveyor who can demonstrate that your belief is correct.

Wigglybeezer_2

We aren't doing it as an investment anyway, although we wouldn't 't do it if the sums didn't add up, we are doing it's difficult to find a similar property in the area, especially with the Scottish closed bid system.