I want to sell a side extention to my house

sarahjune1963

Hi everyone, I'm new on here hope this is the right place!

I have a single storey side extension to my house which I currently rent out. The people who owned my house previously had it built for their daughter, it is a studio flat with its own bathroom and own entrance via a side gate.

I have been made redundant and have only managed to find part time work so I am struggling to pay the mortgage and bills even with the rental income.

My tenant is interested in buying from me, if she can build above the extention to create a bedroom. I have sought advice from my local planning dept and they say there is a good chance I would get the permission but obviously need to submit a full application, it doesn't come under permitted development. They also said once I have that permission, I should submit a further application for change of use to create a separate address etc.

I would like to do this as it would be an opportunity to pay off some of my mortgage and substantially reduce my outgoings and also get myself a decent car and help my son through uni. I am the only one in my road with a side extension all the other houses are terraced and judging by what my neighbour sold for a few months ago, even if I did sell the side extension and just kept the main house it would still be worth a lot more than my mortgage.

I believe I would also need to separate the gas and electricity from the main house and also apply to land registry to create the extension as a new property.

I have sent a fax to my lender asking if they would agree to me doing this, I do have quite good equity in the house so Im hoping they will say yes.

My concern is tho that somewhere along the line the mortgage lender may require me to remortgage, or take out a new mortgage, and they are not likely to agree to that as I don't earn enough money to get any sort of mortgage being on a part time wage!!

Also, I wondered if anyone knows how the land registry thing works, is it a case of applying to have my property split into two pieces of land to cover the house and the extension? And if so wouldn't that cause problems with the lender as the mortgage is for the whole thing?

Any advice would be greatly appreciated, thank you.

jbainbridge

I think you'll need the bank's permission as they have an interest in the property. Their interest will be noted on your deeds.

anselld

Not sure how this plan would work anyway.

*If* you could sell the annex you could use the cash to reduce your mortgage, but you then don't have any rental income.

Assuming you are charging a market rent I would expect the reduction in rental income to outweigh the reduction in mortgage.

Plus you have the expense of plans, planning applications legal fees, etc, etc.

The whole plan does not seem to make any financial sense.

SailorSam

Although i imagine it's going to be a messy thing to organise, when you think about it it's only like when a big house may be split up into flats, and that happens all the time. So it must be possible.

Update:

http://www.independent.co.uk/money/mortgages/tough-times-call-for-splitting-a-home-in-two-2034690.html

davidmcn

Presumably the extension would need to be built before your tenant could buy - so is she proposing to pay for the work?
Is she likely to do so without a contractual commitment by you to sell to her?
Do you know what the two new houses would be valued at?
Will your lender agree to the dimunition in value of your property?
Will the valuation of the extension be sufficient for her to get a mortgage (assuming she needs one)?
What happens if she doesn't buy - is there a ready market for your extension (maybe not if it's an unusually small house for your area)?

lincroft1710

I'm surprised the planners will allow you to separate the properties, most annexes have planning conditions which say the annex can't be sold separately from main house.

Do be aware that architect's fees and 2 sets of building applications could cost £2,000. And you could be refused. Do you know if the foundations are strong enough to take another floor. Current ones will be, older ones probably won't.

Also think of the disruption and intrusion while the building work is carried out,

Does your tenant realise how much an extra floor will cost? how will she finance it?

smileygill

I wonder how a staircase will fit into the plans? In more usual circumstances, the upstairs would be reached via your present staircase, but if the annexe is separated it will require its own. Just a thought.

eddddy

It sounds like you would need a chunk of cash to invest in getting plans drawn up, applying for permission, building the first floor (or demolishing the existing annex and rebuilding with 2 floors).

If you don't have that cash available, it might be easier to apply for outline planning consent for the new house, evict the tenant, and just sell the land to a builder/developer. (But maybe you don't have the heart to do that!)

You would need your lender's permission, and they may insist that some of the sale proceeds are used to pay off the mortgage.

As a starting point, explain your plan to some EAs, and ask them to:

i) Value your house as it is
ii) Value the house without the annex/land. And value the proposed 'development plot'.

... to make sure that you would actually make a profit. (Make sure you pick EAs that are experienced with building plots etc.)

xylophone

If you sold your house, would you have enough to buy a smaller property outright?

It might fetch more if you could sell with planning permission?

clockworks_2

What you're suggesting is do able and has been done plenty of times . Parking is one of the biggest issues. Both properties have to have adequate parking facilities.

freeisgood

It would affect your house value as you would become a semi. (or terraced if you are already a semi)