Bed and Breakfast

adrian1979

Hi all!

Just wanted some advice please, I'm a first time buyer. We came across a 'bed and breakfast' and although I won't be involved in it, it's something my wife has always wanted to do. We want to buy through Nationwide and the property is freehold. Is this now classed as commercial? If so we won't have a big enough deposit. My wife has her heart set on a 'Bed and Breakfast', if I bought a property and turned it into a bed and breakfast would Nationwide allow me to do that? It all seems a little complicated!

Thanks:-)
Adrian

ACG

You would need commercial finance if you want to buy a business. Nationwide I do not think do commercial finance.

You can not buy a residential property and turn it in to a B&B without the lenders permission and they would not do that.

You need commercial finance, I think thats a 25-30% deposit although if you have an existing property you may be able to forgo some of that deposit if you allow the lender to take s econd charge over your current property.

betmunch

Hate to disagree, but Nationwide will actually consider a B&B in the right circumstances. Its a quirk in their criteria and I believe the only residential lender to do this so you are lucky you are with them.


You will need to discuss the full situation with them/your broker to determine if it is suitable for you to proceed.

ACG

betmunch wrote: »

Hate to disagree, but Nationwide will actually consider a B&B in the right circumstances. Its a quirk in their criteria and I believe the only residential lender to do this so you are lucky you are with them.

Everyday is a school day.

kingstreet

Yep. I was having a gander at this the other day;-

http://www.nationwide-intermediary.co.uk/lendingcriteria/property_and_construction/part_commercial_properties

betmunch

ACG wrote: »

Everyday is a school day.

Yeah, its a good one to know about.


Shame they restricted the rooms, it used to be maximum of 4 rooms let, which would have been adequate for a lot of part time B&Bers

ACG

Yea I was just reading and thinking 2 bedrooms is a bit on the light side - you could not go on 4 in a bed with nationwide could you or even 3 in a bed!

I suppose its still better than most lenders and definitely handy to know.

adrian1979

Thanks!

If I bought the property through nationwide and at a later stage wanted to convert to a bed and breakfast your basically saying this would be a 'No', so I have 2 options:

Change mortgage (I'm guessing I'd need to stump up the 25% deposit).

Or, I just spoke to a B and B owner and he didn't tell his lenders he has guests in the property but I'm guessing he is taking a big chance with insurance