Converting house to flats; guidance on procedure? ?

sophy_p

My partner and I are splitting up. It's amicable and we have always split childcare for our 4 year old 50/50. He's about to start a local school and we can't afford to sell our house and buy 2 properties nearby. We have a Victorian 4 bed terrace and want to convert to 2 flats; 1 each. We have a lot of equity - 140,000 mortgage; house worth approx 400K. Lots of houses in our street split into flats; average value would be 220K per flat. We've been with Halifax for our current joint mortgage on the house for 10 years. Any advice? Should we go to Halifax first to see if they'd consider bridging loan for conversion (approx 40K)and then 2 mortgages, 1 for each flat? We both have relatively good salaries and have never missed payments. Or do we go to planning first? Do we need a specialist solicitor? Are there any building companies that specialise in this kind of work? Is it better to hire separate tradesmen or get a company that can do everything? Apologies for so many questions. Can't find any clear guidance on how to approach this, despite multiple searches. Only financial advisors who seem to be biased towards lenders they get commission from...

da_rule

First port of call should probably be your planning authority. A lot will offer guidance on whether they are likely to accept any such request. If you receive a favourable response then I'd look to appoint an architect to draw up plans and submit the planning application.

It would probably be easier to appoint a manager in relation to the building works. Some architects may also do this. Mainly because there are a lot of different trades etc to coordinate and you need to arrange for new utilities (gas/water/electric/phone etc) to be installed. As well as the various sign offs from building regs during construction. Not only does delegating this take the stress off of you, it gives you someone you can take action against if it goes wrong.

You'll also have to contact Royal Mail to get a new address sorted out.

For the legal side of it, you probably will need a solicitor. Assuming you're in England/Wales, you'll need to work out how you're going to own the property. The easiest way would be to both jointly own the freehold then have a leasehold title each for your respective flats. This will mean the lease will have to be drafted.

Also, if you are planning on mortgaging the flats for 50% each of the outstanding mortgage then the mortgage company will probably insist that you use a solicitor to deal with the legal side of registering/removing the charges from the existing and new titles.

MrBluesky_2

Yes as mentioned planning permission is the very first step,phone or email your council and ask how they want you to proceed.Some want a prior application,keep a note of names if you phone them,Many councils have different ways of doing things,which is annoying to say the least.
A solicitor with property experience ie conveyancing will be needed (often a solicitor in a group practice will be more helpful rather than a sole solicitor). They can also be helpful with finance arrangements.
Getting the work done,if your in England you could have an internet search for recent council planning permissions/applications in your area/neighbouring area re house conversions,this will show information on who submitted the plans like architects,building companies etc.
It also shows the planning progress and if refused or approved,i did have a PP for a single property to 3 flats available on the internet but the council has changed their internet supply company and lost hundreds of applications.

eddddy

sophy_p wrote: »

We've been with Halifax for our current joint mortgage on the house for 10 years. Any advice? Should we go to Halifax first to see if they'd consider bridging loan for conversion (approx 40K)and then 2 mortgages, 1 for each flat?

The terms of your residential mortgage probably don't allow you to convert the property.

Property conversion/development is much higher risk than simply living in a house.

I guess some people might suggest that if you say nothing to your lender, and keep paying the mortgage, whilst you do the conversion - your lender might not find out.

But I guess if you apply for a bridging loan from somebody else, they will want to put a charge on the house - which would alert your mortgage lender.

Doozergirl

How do you know it's going to cost £40k if you haven't approached anyone yet?

You will need an architect straight away to produce drawings for planning and, importantly, for building control. Building regs are stringent for conversions - it is treated as a new build with the expectation to meet all regs in all areas. You will find that you're going to be doing a lot more work than you imagine.

Your current mortgage won't be suitable for the project.

If two flats cost £220k each to buy, and you current house is worth £400k, then spending *at least* £40k on a conversion and then having two separate mortgages means that you can afford to buy two properties. In fact, buying two and not converting is going to be more financially viable.

£40k just isn't realistic.
It's going to cost more than the value of the flats to convert the house. If you can afford to convert, you can afford to buy separately without huge amounts of stress and an uninhabitable property for a good period of time.

MrBluesky_2

[QUOTE=Doozergirl;

£40k just isn't realistic.
It's going to cost more than the value of the flats to convert the house. If you can afford to convert, you can afford to buy separately without huge amounts of stress and an uninhabitable property for a good period of time.[/QUOTE]

Did a one dwelling conversion into three last year and there was change from £40k a lot of change and that's in London zone2.
Legal costs and professional services were more than i wanted to pay but when selling the flats it made the process straight forward.

aneary

I would personally buy two flats already completed near each other but not on top of each other, no matter how clean the split is do you really want to see the coming and goings of new partners.