Buying above commercial

Stillunsure

I'm currently in the process of buying a loft flat on the third floor above a drugstore that has been there many years, it is in zone 3 in a lovely area of South-West London .

It is 0.1 Mile from an overground and underground ( Northern line station)

I love the flat it is a large one bed and the transport links are out of this world, it is by far the best thing I can afford in the area both location wise and space.

I'm not "in" a lot , I want to use this place as a personal bolt hole and may wish to rent it out in 3 years down the line as it is in an area with very strong rental yields.

I've been renting in the area for 3 years in flat shares, paying more than what I would be paying on both bills and mortgage combined .

My surveyor has said the property is in great condition for its age and his only concern is to check if there is any prohibition on the commercial property being changed to A3 /A5

What are your thoughts ? I'm in two minds.

Buy it live in it and worst case renting it out in the future would be fairly easy given the location, rental yields in the area which I have checked etc.

or Run. ' Because it might be hard to sell'. - Although I have a friend struggling to sell a beautiful 2 bed not above commercial - so a normal flat may not be struggle free

Would love any advice! Thanks in advance guys.

Stillunsure

Sorry had to new account for anon!

G_M

Do you need a mortgage?If so, have you arranged one and will the lender accept a property above a commercial property?

If not, have you considered the difficulty selling if your buyers cannot get a mortgage?

See:

https://www.theguardian.com/money/2017/apr/29/flat-value-fell-restaurant-opened-below-planning-policy

google 'mortgage above commercial premises' for more.

davidmcn

Stillunsure wrote: »

his only concern is to check if there is any prohibition on the commercial property being changed to A3 /A5

I would guess any "prohibition" wouldn't be one which you could enforce anyway, in which case you're only a planning application away from having a 24 hour kebab shop underneath you. That's a general risk with being in the same building as commercial premises.

Stillunsure

Hello, the mortgage company are OK with it. And to be honest it is a double retail unit which makes it unsuitable for a takeaway unless it becomes a curry house mecca - realistically it would be a restaurant or large shop I imagine would it really knock 50% off the value in zone 3 , busy high street with lots of buy to let potential

Also, my conveyancer is asking about consultation for change of use / potential compensation.

ST1991

If you are having second thoughts or unsure, then expect future potential buyers to be in the same frame of mind.
I would always be wary of buying something above a shop, as the use could change, and i would never buy something like that unless my sole purpose was to rent it.

It sounds promising that you can get a mortgage on it, but if the usage changes (to a takeaway or launderette for example) then it may make it un-mortgagable in the future.

So, if none of that phases you, i see no reason why not?

davidmcn

Stillunsure wrote: »

to be honest it is a double retail unit which makes it unsuitable for a takeaway unless it becomes a curry house mecca - realistically it would be a restaurant or large shop I imagine

Or it could be subdivided. And even a "nice" restaurant will pose a problem for lenders who have a policy against any licensed premises.

As you say, the flat may well always have a reasonable market, but there will be buyers excluded because their lenders say no.

martindow

I suppose it all comes down to the price. It should be priced well below a similar flat that is not over commercial premises. You really are taking a gamble over a possible change of use over which you have no control.

Stillunsure

Would anyone have the knowledge to help me look in to that?

TIA

davidmcn

Stillunsure wrote: »

Would anyone have the knowledge to help me look in to that?

On price? Your surveyor gives you (or has already given you) advice about the price.

ST1991

Do you have a rightmove link?