How much can we borrow we a rental income from annexe?

Cici_K

Hi

We are first time buyers, I'm originally from Australia and unaware of lending here in the UK. We have just fallen in love with a house advertised for £475k, it comes with an annexe which was previously rented for £550pm. This all done properly and legit.

My question is will the mortgage lender consider this rental income and allow us to borrow more money? And does anyone know how much that would be?

I've read many months back about brokers on here, hope someone can help us. We won't be able to get the mortgage without rental income. I'm praying it will be a big fat yes for us to be able to put in an offer.

Thanks

Sorry the thread doesn't sound right, can't amend it.

kingstreet

Highly unlikely.

Cici_K

kingstreet wrote: »

Highly unlikely.

Really, the annexe has its own tax band.

That is really different compared to Australia. I'm a financial planner and worked closely with a mortgage broker

Senior_Paper_Monitor

In that case you will know the value of a good mortgage broker who is familiar with the details of the local regulations/policies and those of the individual lenders.

So get one

This will not be easy to place for a number of reasons

holly_hobby

Please keep to 1 thread for the same subject.....
https://forums.moneysavingexpert.com/discussion/4812450

If it has its own council tax band, it suggests its on its own title deed, which means that its completely separate entity (legally) to the main dwelling in any event, equating to the requirement of 2 separate mortgages if you wished to pch the 2 units (unless the title split was reversed).

Fraut with issues for those requiring a mortgage to pch .. walk away would be my advice.

Hope this helps

Holly

Cici_K

Sorry I'm not sure what happened before. Somehow I managed to have two threads. I didn't know how to delete.

I've been reading about tax bands now as well. I would only consider a tenant for 6 months before I receive my dads estate and pay everything out. Of course have to consider exit fees.

I love the house, I can now see why it had an offer and after months it was pulled.

I've read that only way to get it part of the main house was to pull everything out, plumbing and electrics. It's brand new, why on earth do people build these annexes?

Thank you for your advice.

Cici_K

Senior_Paper_Monitor wrote: »

In that case you will know the value of a good mortgage broker who is familiar with the details of the local regulations/policies and those of the individual lenders.

So get one

This will not be easy to place for a number of reasons

Sorry I meant I worked closely with one back home in Australia. Not here in the UK. Seems best we walk away, imagine the issues reselling. Thank you for all your help.

holly_hobby

For a residential mge the surveyor will only want to see 1 kitchen, and that the dwelling is obv for a single family unit.

The issue for the lender is if you default on the mge and you are letting the annex (where they are classed as a single dwelling under 1 TD), is the issues this will cause to they seeking a vacant possession order (ie evicting the tenant from the annex).

Some lenders can be more flexible, where there is 1 TD, and the annex is occupied by a fellow mortgagor (ie you and parents buy together and have separate internal private areas) - as I say largely due to possessionary issues, but the restricted re-sale market will be a big turn off for them (when considering resale on default).

Hope this helps ....

Holly x

Cici_K

Thank you Holly for your help. The house in an old post office cottage, it has heating issues. Gorgeous as it is we won't be leading with our heart. Mainly mine. I've been a previous homeowner in Australia and buying first time here and very soon inherit a lot of money. Money my dad worked very hard for. Can't do that to my dad. Thank you so much, I will cancel the second viewing.

Senior_Paper_Monitor

CiCi - I assumed you meant you worked with one over there.

The rules/lenders here will be considerably different. I was not decrying your man - I'm sure he is fine there (and suspect I wouldn't be for a year or so while learning their ropes). But you will presumably appreciate what a good one can do in their own bailiwick.

Whether it will doable/worth doing is in the detail (and you are quite right about the reselling issue) - may be worth a small investment in a professional (possibly more than one to cover all issues) to review and advise, but certainly be prepared to walk.

Equally because of these issues there are some 'real steals' out there.

holly_hobby

It will come down to the surveyors comments, if you want to risk a survey fee then see what it comes back with, at least then you've bottomed it out.

As an ex Post Office, you also need to check that there has been change of use with the local authority (ie commerical to residential use), and if the property is of unusual residential layout (due to its past history) it may cause further issues .... which means that any future buyer you may have, may also face the same issues and hurdles.....

Let your head do the talking xx

Lets us know how you get on ..... good luck x

Holly xxxx