Unoccupied property - would lenders refuse a mortgage

BeardedMan

Hi All,

I have had an offer accepted, but the property needs extensive refurbishment works which could take several months to complete. During this period the property would not be occupied.

My mortgage advisor has raised a concern that, due to stricter lending requirements, lenders will not be comfortable with lending against a propery that will be vacant for such a period of time.

He has advised that I take a mortgage out on my current property (which is mortgagefree), buy the new one outright and and then switch the mortgage/pay it down once works have been completed and I can sell my current house.

Seems like a roundabout way as I would much rather take a loan out on the new property. Is his advice correct?

BM

kingstreet

You may be better off raising the money on your own property. Not for the reason stated though. The condition of the purchase property may make mortgaging it difficult.

Lenders don't ask about immediate occupation. As long as you can insure the property, you'll be fine.

BeardedMan

Thanks for the reply.

But to clarify my OP the property I buying is sound but needs generally updating and I am intending on sticking on a double storey extension.

So I don't think the condition will be an issue. But you have answered my question that being initially unoccupied will not be a problem

Thrugelmir

Though you may an issue with insurance.

dimbo61

You need planning permission to stick a two storey extension on the property.
To do that you need plans drawn up and submitted to the planning department.
This could take 6/12 months or longer.
Lenders want a working kitchen and bathroom !

BeardedMan

I have seen numerous recently sold properties that go through refurbishment and extention works whilst not occupued.

How did the buyers manage to get the loans to enable them to do it?

dimbo61

Knock on the door and ask.
We bought a property a few years ago and had the whole property gutted from top to bottom over three months.
Builders in every day and moved tenants in straight after building work finished but this was a rental property and Lender had agreed to refurbishment of property.
Informed Buildings Insurance company who were happy as no scaffolding needed.

densol_2

BeardedMan wrote: »

I have seen numerous recently sold properties that go through refurbishment and extention works whilst not occupued.

How did the buyers manage to get the loans to enable them to do it?

Maybe they raised funds on their own mortgage free property and got a good rate etc ? Seems the easiest way to me is to do that as suggested above ?

amnblog

BeardedMan wrote: »

I have seen numerous recently sold properties that go through refurbishment and extention works whilst not occupued.

How did the buyers manage to get the loans to enable them to do it?

They used cash.

planning_officer

dimbo61 wrote: »

You need planning permission to stick a two storey extension on the property.
To do that you need plans drawn up and submitted to the planning department.
This could take 6/12 months or longer.

Wow, your Council must be very slow! The statutory period for a householder planning application is 8 weeks - it should take no longer than that. (Unless you're implying there may be several refusals, appeals etc, and the whole process would then take much longer!)


Besides, not all two storey extensions require a planning application. If you're not in an AONB, National Park or conservation area, then you can undertake a two storey rear extension, with a maximum depth beyond the ORIGINAL rear wall of the property, as permitted development (subject to complying with various other criteria too, re. distance to boundary, height, eaves height etc). It also cannot project beyond any side wall - even a recessed side wall (not just the outermost side walls).

dimbo61

Yes I fought the Council and after about 12 months we won on appeal !
Student property. Article 4
Altered the plans twice to please the planning department and still turned us down :-(
Appeal had to be third set of plans ( smaller extension ) but finally approved and now built.
Planning Officers ? objected to plans ie parking, over crowding, noise, and Article 4 which did not apply at that time.
Are they helping the public or political reasons