Property conversion & mortgages

SlapShot

Hello,

I'm looking at buying a property (freehold) which is: a) a little on the large side for us right now; (b) needs some work; but (c) easily split-able into 2 flats with an easy route back to creating a single large residence. We'd need to be able to get some rental income from the top flat to make this work, but we love the place and would be living in the downstairs flat until we needed the extra space, at which point we'd convert back. (If this makes sense!)

I've checked out the local building regs, and I think there are no issues with what we're proposing here (will of course get advice on this). But the main questions relate to the financing, and how this would work....

We can finance the initial purchase with a 65% LTV residential mortgage. However, post-conversion, we'd no doubt have to remortgage. We'd not be looking at splitting the deeds (unless we have to), so how would this work post-conversion? Upstairs would be rented out; we'd be living downstairs. This clearly rules out a regular residential mortgage for the whole building. An obvious route would be to arrange a BTL mortgage on the top flat and a regular mortgage on our flat but could this be done without splitting the deeds?

Thanks for any advice, this is new territory for me!

SlapShot

dimbo61

" no issues "
Have you checked with the local council?
You may need to rebuild the property to comply with New Building regs IF you get planning permission.

SlapShot

Yes, I've spoken to the council already and been through the various local policies and regs as much as I can. Will obviously need to look into this in a lot more detail, also at the survey stage, but I need to get round the initial basic hurdle of the financing, or at least have clear how this could/should work.

Thanks!

Thrugelmir

SlapShot wrote: »

An obvious route would be to arrange a BTL mortgage on the top flat and a regular mortgage on our flat but could this be done without splitting the deeds?

You would need to split the deeds. Any conversion would require the current lenders permission before commencement of the works. This is unlikely to be given. As mortgage finance is not intended for this type of funding.

SlapShot

Thrugelmir wrote: »

As mortgage finance is not intended for this type of funding.

Thanks. In which case, how is something like this normally financed? Are you straying into the territory of a commercial loan?

tvfreek

Converting a house into two flats isn't that uncommon but usually it would be a buy to let property to start with and not your own home.

You would need to purchase the property with a lender who would allow the conversion and lend on that basis, trying to achieve this any other way will not work.

This is a specialist broker case.

SlapShot

OK, thanks, this is really helpful. Have found e.g. http://www.buildstore.co.uk/finance/renovation.html which is along the lines of what we're looking for.