Commercial property purchase to live in, advice and funding options help appreciated!

boxrick

I am currently in the process of trying to purchase a commercial detached property. It was at some point in time a house then at some point over the last 20 years got converted to some offices.

The building exists today as a large open plan area across two floors, I believe it has a basic kitchen and a bathroom.

I have a fairly sizeable deposit which amounts to around 25% of the purchase price and if this property was a regular home I should have no issues financially getting a mortgage.

I live with my girlfriend who I have just passed full ownership of our apartment to and moved her onto the mortgage alone as to unlink me from this building in order to make sure this doesn't impact me purchasing this or any other building.

I wish to purchase this building and do the following:

* Get planning permission to change it back to residential.
* Renovate it under my own steam doing much of the work myself and paying for things out of remaining purchase funds, and spare monthly income and / or credit cards as required.

I have a mortgage advisor who specialises in standard home mortgages, but this is a little bit of an oddball. From what I read, I will require home builder mortgage for this type of properly. However I do not require any additional funding over the initial purchase to do the work I require.

So simply put any advice or warnings are appreciated.
What sort of funding options are available to me, is there any capacity of me getting a regular mortgage before this change of use ( ie it does have a kitchen and is a reasonable state of repair )

Cheers!

davidmcn

boxrick wrote: »

is there any capacity of me getting a regular mortgage before this change of use ( ie it does have a kitchen and is a reasonable state of repair )

No, even if you went for a self-build type of mortgage you wouldn't be able to draw down any of it before getting planning consent for residential use.

AdrianC

Can you get a residential mortgage on a commercial property, which doesn't have planning permission for residential use, and which probably isn't currently deemed as habitable?

I think you know the answer to that already, don't you?

boxrick

AdrianC wrote: »

Can you get a residential mortgage on a commercial property, which doesn't have planning permission for residential use, and which probably isn't currently deemed as habitable?

I think you know the answer to that already, don't you?

Correct, I don't think it's possible. But they're may have been things I didn't consider or was not aware of!

SmashedAvacado

You will be able to borrow money to buy this, but the rates, and terms of such loan will be different.

A commercial lender will let you do this - the rates will be higher but this will be a short term issue. YOu could make the application for planning permission now - you dont need to be the owner to do this, but it might be better for you to wait until exchange. I would also recommend getting a few extra weeks for completion which will buy you some time to make the application asap after exchange.
Apply for planning asap
As soon as you have planning, refinance with a resi lender.

Comms69

Get planning permission first, with reserved rights to purchase.


Otherwise this isn't going anywhere

teneighty

The change of use could well be permitted development so you probably will not need planning permission but you may need to go through the prior approval process.

da_rule

With the sellers consent you could make the application required for change of use (this may be permitted development but may not if the building is listed etc).

If you’re worried about spending the money to do this, you could enter into a conditional contract with the seller whereby he’ll sell it to you if you get the change of use. You could also look at getting a mortgage with the condition that they won’t lend until the change of use is approved.

Ozzuk

I bought a commercial place to live in many years ago (10ish), but it was a hundred+ year old set of cottages used as holiday lets.

Things have changed now on the lending front, but for us some of the challenges were:
Commercial mortgages are much higher rates with high arrangement fees, sometimes a business case/plan is needed. LTVs of 50-60% common.
Planning required us to 'offer' the building to the local community first, and prove it wasn't commercially viable. We were helped by neighbours sending a note in supporting the development.
We had to pay business rates on the property, and insurance was more expensive, and choice of lenders was greatly reduced.


So it cost a bundle, but we did it, applied and secured residential permission and then changed the mortgage to residential. If you intend to do this, make sure you don't have early repayment charges on whatever temporary funding (bridge or commercial) that you source.

boxrick

Reading the following it appears I don't need planning permission for b1 to residential.

https://www.gov.uk/guidance/when-is-permission-required#What-are-permitted-development-rights

It sits just outside any exclusion zones and the property is basically completely livable today. ( kitchen, shower bathroom ). I wonder if this changes the type of mortgage I can apply for.

boxrick

I am thinking about making a conditional offer based on change of use. PDR rules seem to indicate that I simply need to inform the council and this should happen without much hassle, but I have emailed to confirm.

Does this sound like something a lender would entertain?