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Financial advice required to purchase property switching from commercial to residential use
sioioos
Posts: 3 Newbie
I wonder if anyone could offer any advice on finance/lending options for a potential unusual property purchase.
Our local old village hall is on the market and I would love to buy it. Several people have made offers, but have been refused a residential mortgage, due to the property currently being actively used as the village hall until the new one is built (due for completion summer 2019). As a result, the Parish are asking for ‘cash’ offers only.
Details of the property
Property - Victorian Village hall (not listed), in generally good working order, as it’s used as the current village hall, with working kitchen and toilets (but no shower/bath).
Planning – Planning permission has been granted to convert the property to a 3 Bedroom house. This was sought by the Parish Council ahead of the sale.
Value – On sale for £500k, which has priced in some of the potential value increase, but generally seems a fair market value.
Sale requirements – The parish will build a new, larger village hall that is due for completion in the summer of 2019. The sale of the old hall is subject to an exchange of contract, followed by an agreed completion date next year, to be mutually agreed when the new hall is finished. A 10% deposit has been muted by the estate agent as a requirement.
My position
I want to present myself as a cash buyer. I have the ability to pay a deposit of up to 10% now, and I will raise the remaining c£450k through the sale of my current house. I have no mortgage and my current house is valued c£550k. I intend to sell and then rent for the remain months until the hall purchase can be completed.
In theory, I will have the cash, with some spare, but the concern is if the sale of my house is delayed or falls through prior to making the payment for the next property. Obviously I have the full equity of my house (c£550k) and I would need to make a final payment on the next property of c£450k.
The lending issues seem to be that the Hall is commercial, until it is moved into, where by it becomes a residential property upon completion of minor works (conversion of a store room into a bedroom and a gents toilets into a bathroom).
Would anyone be able to give me some advice as to back up lending options, should I not be able to sell my house in the timeframe agreed in the contract to purchase, or does anyone have experience in lending as part of a property switch over from commercial to residential?
Even if I did borrow against my existing house, I would only want it as a temporary measure until it is sold, where I would move into the hall. I am looking at it as my main residence, not as a development at this stage.
Any help would be greatly appreciated.
Our local old village hall is on the market and I would love to buy it. Several people have made offers, but have been refused a residential mortgage, due to the property currently being actively used as the village hall until the new one is built (due for completion summer 2019). As a result, the Parish are asking for ‘cash’ offers only.
Details of the property
Property - Victorian Village hall (not listed), in generally good working order, as it’s used as the current village hall, with working kitchen and toilets (but no shower/bath).
Planning – Planning permission has been granted to convert the property to a 3 Bedroom house. This was sought by the Parish Council ahead of the sale.
Value – On sale for £500k, which has priced in some of the potential value increase, but generally seems a fair market value.
Sale requirements – The parish will build a new, larger village hall that is due for completion in the summer of 2019. The sale of the old hall is subject to an exchange of contract, followed by an agreed completion date next year, to be mutually agreed when the new hall is finished. A 10% deposit has been muted by the estate agent as a requirement.
My position
I want to present myself as a cash buyer. I have the ability to pay a deposit of up to 10% now, and I will raise the remaining c£450k through the sale of my current house. I have no mortgage and my current house is valued c£550k. I intend to sell and then rent for the remain months until the hall purchase can be completed.
In theory, I will have the cash, with some spare, but the concern is if the sale of my house is delayed or falls through prior to making the payment for the next property. Obviously I have the full equity of my house (c£550k) and I would need to make a final payment on the next property of c£450k.
The lending issues seem to be that the Hall is commercial, until it is moved into, where by it becomes a residential property upon completion of minor works (conversion of a store room into a bedroom and a gents toilets into a bathroom).
Would anyone be able to give me some advice as to back up lending options, should I not be able to sell my house in the timeframe agreed in the contract to purchase, or does anyone have experience in lending as part of a property switch over from commercial to residential?
Even if I did borrow against my existing house, I would only want it as a temporary measure until it is sold, where I would move into the hall. I am looking at it as my main residence, not as a development at this stage.
Any help would be greatly appreciated.
0
Comments
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you could look at a self build mortgage which is in effect what you are doing albeit you are converting from an existing building0
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Wouldn't be a cash offer then though would it...SmashedAvacado wrote: »you could look at a self build mortgage which is in effect what you are doing albeit you are converting from an existing building2024 wins: *must start comping again!*0 -
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Thank you both for your replies. The Estate Agent is, in this instance, considering 'cash' as someone who is not in a chain and has the financial means (even through borrowing) to meet a full payment next summer as per the likely contract.
He suggested that could be real 'cash' or lending that is not tied to the Village Hall.0 -
The simple answer is to remortgage your house to something with no tie-in penalty and low initial fees.
It'll be the cheapest way to borrow.Everything that is supposed to be in heaven is already here on earth.
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Before getting hopes up pay for a full title check. Don't rely on seller solicitors.
Sales of public community buildings can be full of traps for the unwary, including potentially the Parish Council as they generally only operate the property on behalf of the local County, City Council etc and don't have asset holding powers.0 -
SmashedAvacado wrote: »The OP was after lending options.
The borrowing options would have to be against their current home though, not the one they want to buy.2024 wins: *must start comping again!*0
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