Buy to let, new house and building plot :(

Cosmoid

Hello everyone,
My first post here and I'm just wondering if anyone has been in a similar situation and can offer any advice.
I own my flat with an outstanding mortgage of £46000. The value is approx £110000.
I have found a house I want to buy it is offer over £130000. The home report suggests a retention of £5000 due to som work required. There is a building plot adjacent for sale by the same seller for offers over £85000. I would love to buy this as well, but couldn't afford to build for approx 1.5 years.

Now comes the complicated bit. I'd like to keep my flat and let it out for approx 800 per month as well as buy the house and hopefully the plot. I would hopefully release some equity up to the 70 percent ltv limit for buy to let mortgages to assist with a deposit and I can find enough cash to make it up to an overall 20 percent deposit provided I didn't have to go over the offers over price ( it is a rural property and has been on the market a while,)
I think my best bet is to contact the seller and ask them to group the plot and house together as one lot to make a mortgage easier to obtain..

Has anyone been in a similar position? Any advice? Im feeling a bit stuck with it being the weekend. I realise this may be a tall order but if you don't ask, you don't get!So I'm going to at least investigate what I can do, the house is lovely and it is an ideal medium term investment for me ( barring another financial meltdown!)

Thanks!

Annisele

I think this is probably one for a broker.

It sounds as though the house and the building plot are currently two separate titles. If that's the case, then having the seller group them together as one lot might be trickier than it sounds.

You wouldn't get a standard residential mortgage on a building plot. But then, you probably couldn't get (and wouldn't want) development finance for a residential house.

Even if you did merge the titles and get residential finance to buy the whole lot, you might then have trouble when you came to build. You generally need your lender's permission if you're going to do drastic things (like build more houses) on its security, and a residential lender might not give that permission.

ValHaller

It is unnecessary to merge titles for a residential mortgage.

The difficulty will come in valuation - will the lender accept a valuation based on the building plot having Planning Permission? Given that Planning Permission expires, they may be unlikely to accept this valuation, leaving you in difficulty over your LTV

Cosmoid

Thanks for your reply Annisele. Yes, you are probably right about the separate deeds, I was over simplyfying it. I definitely couldnt buy the plot with finance in place for the build, as well as buy the house beside it. Best option might be just to buy the house and hope no one buys the plot... I still like the house, it would just be ideal with the plot as well.
The sellers aren't willing to sell for less than the offers over price and there have been no offers made for the plot on its own apparently so it may be that they hang on to it for a while. They are selling off a fair bit of land in the area so I may be lucky and be able to negotiate with them later.

Cosmoid

You are also right Valhaller, particularly as I wouldn't build on the land immediately... My chances of success are slim...
Thanks!