Land with planning for business and house. advice please.

BettyBean

My partner and his father are interested in a piece of land for their business. The land currently has a business running from the site but also has planning for a house.

What they would like to do is run their business from the site but also build a home for us along side. Would my partner and I be able to get a separate mortgage to build? Or would everything need to go through the business? This would be our first home. Unsure how it would all work?

Xyzzy

2 things- if you're keeping it all on the same title it would be commercial, so no residential mortgage. You could consider splitting the title, so the house is separate to the commercial bit, there would be some legal work involved there. I'm also assuming that there wouldn't be money secured on the land already, if there is then splitting the title isn't likely to be possible, and at best would be a minefield. You'd also be looking at a self build mortgage so best speaking to a broker regarding this

BettyBean

Thank so much for the reply xyzzy! I really didn't think we would get one. Excuse me for being dim, I'm very new to all of this, but when you say you assume there won't be money secured on the land already, what do you mean by this? Do you mean if we haven't already made an offer?

Thanks again for your help just trying to find out as much as I can.

I think that the conditions of the land is that the house and business will always go together. But I'm not entirely sure how that works. I think because it may have originally been agricultural land.

minimike2

If you plan to split the title then you should consider access points, making sure each site is accessible without going over the land on the other deed.

Also you will need a specialist product if you wish to do a self-build. A lot of lenders came away from it after 2008 due to the higher risks and low margins because of the increased costs to process.

Also what does the business do, as this will impact the mortgagability of any property next to it.

If there is conditions stating that two properties are somehow tied, you will not be able to split the deeds, making commercial the way to go - You need to check those conditions. Likewise any agricultural ties will need to be checked as this can cause issues for lenders as well.

BettyBean

Thanks very much Minimike2!! They have a removal company. So it would be mainly parking for lorrys, storage and an office. The house plans have a separate driveway to the business side.

minimike2

Would come down to valuers comments and opinion then - Lots of heavy goods lorries coming and going / being parked up constantly could certainly affect the value and/or saleability of a property right next door.

Lots of if's and but's. Solicitors would be a good start to find out the situation with the land before going to a mortgage broker, as the detail of that will be critical. You may end up needing something on a commercial basis as already stated.