Mortgage on property that has a part holiday let

TamsinC

Tom99 wrote: »

[FONT=Verdana, sans-serif]Still check the Council Tax bands:[/FONT]
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[FONT=Verdana, sans-serif]https://www.gov.uk/council-tax-bands[/FONT]


[FONT=Verdana, sans-serif]Even if the annex is not listed with a separate band the fact it is now being advertised and sold with an annex may trigger the VO to look and see if the annex should have a separate band.[/FONT]
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[FONT=Verdana, sans-serif]Then, if no separate CT band, check if it has a separate business rates, rateable value:[/FONT]
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[FONT=Verdana, sans-serif]https://www.gov.uk/correct-your-business-rates[/FONT]

Many thanks for those links the house is not listed on either as having separate CT bands not separate business rates etc. We don't intend using it now as a business we are just going to use it as part of the main house - so hopefully even if the VO does have a look they will see it isn't being used as a business etc.

TamsinC

SDLT_Geek wrote: »

Is the annex is self contained enough to be suitable for use as a separate dwelling? In particular are the services (like heating, electricity, hot and cold water) capable of separate operation and isolation?
If so perhaps you qualify for multiple dwellings relief for SDLT purposes.

It can be used as a separate dwelling I suppose, It has all amenities but only some isolation from the house. They all run on the same single system though. You can turn the electric off (switch on a the main circuit board in the main house - bit like the ring main for upstairs or downstairs I suppose) but not the hot and cold water. Heating is electric.

Woud claiming multiple dwelling for SDLT (and this is in Wales so not sure if the same rules apply)trigger council tax issues though?

demontfort

Be very careful which lender you pick, I just had a purchase of a house with basement flat annex fall through after both HSBC and Natwest refused to lend because of the annex.

Thrugelmir

Is there interior access from the house into the annex.

TamsinC

minimike2 wrote: »

Regardless of what it will be used for it isn't about "getting permission" from the mortgage lender as such, it is about if it will fit your lenders valuation criteria or not. Most lenders do not like lending where there is a self contained property / annex on the deeds as it leads to legal issues in the event of repossession where the property has been let.

This isn't a case for submitting an application and seeing what happens. A lender needs selecting who will allow such a property and even then it will still come down to the valuer comments confirming it meets the policy.

I have taken advice and have a specialist broker onto it. As far as I am aware it isn't listed separately on the deeds

Thrugelmir wrote: »

Is there interior access from the house into the annex.

not a the moment - though there may have been at one point.

sitesafe

TamsinC wrote: »

not a the moment - though there may have been at one point.

I think if there's no access from main house into annexe it might be treated as separate

CIS

From what you have described it is likely that the 'holiday let' should have it's own council tax band - the VOA would confirm but I'd be very surprised if they don't band it.

Assuming England;
For council tax purposes an 'annexe' has a specific definition and it has to meet certain criteria to be regarded as an 'annexe' and before it could be considered for any related reductions.

TamsinC

CIS wrote: »

From what you have described it is likely that the 'holiday let' should have it's own council tax band - the VOA would confirm but I'd be very surprised if they don't band it.

Assuming England;
For council tax purposes an 'annexe' has a specific definition and it has to meet certain criteria to be regarded as an 'annexe' and before it could be considered for any related reductions.

It's in Wales

CIS

TamsinC wrote: »

It's in Wales

In which case :


What I stated about the VOA still holds.

Annexe rules in Wales are broadly similar but less generous than those in England.

TamsinC

Strangely, and this is merely an 'how odd' observation, we just pulled out of a purchase for various reasons, contracts all signed, mortgage offer in and waiting (seller encountered problems and we had to withdraw as it looked like a date for exchange was going to be many months in the making) - this building too had an annex (two in fact - one within the the main house and one attached but own entrance etc0. Not once did this come up either with the solicitors 9in terms of CT or anything else) nor the mortgage people and the valuations a proper inspection for the mortgage. Also in Wales. The ONLY reason this one came to my attention was the fact it was used as a holiday let already whereas neither were in the other house.

I'm assuming that should the holiday let incur it's own council tax band, then the main house will them reduce as it no longer has that part of the house included in it's banding?

Hey ho, we shall see what is and do whatever needs to be done to buy the house.