House with annex and second kitchen

jimbo1986

We have had an offer accepted on our next home.
On seeing our mortgage adviser all seemed fine with offers of around 1.68%. However a day or 2 later she pointed out a number of lenders have rejected our request as:

"they will not be happy to accept the property as it has a separate kitchen and bathroom or it could potentially be rented out. They have said there is no way of knowing whether it would be rented out".

This has left us with only one offer from Nationwide (according to our adviser) at 1.94% and around £15k less than we were hoping for. We can make up the shortfall using savings but we were hoping to use this money for renovation.

The house was once 2 cottages, but is now one property with a conservatory joining the two, and there is no dedicated entry to 'annex'. What defines an annex, or an extra bedroom on the rear? What defines a second kitchen or a utility room?! The floorplan on the property states second kitchen, but there is no cooker, just a sink, washing machine, so really is used as a utility room. How does the lender determine the use without having seen the place?!

I now have concerns about paying 2 lots of council tax too!

What should i do here, take the higher offer from Nationwide? Shop around for quotes direct from lenders? Tell my broker that it is not an annex with dedicated kitchen?

eddddy

Typically, it's the presence of cooking facilities that make it a kitchen.

In the circumstances you describe, often people will just remove the cooker and call it a "utility room" or "laundry room" - but you say the room has no cooker anyway.

Why do the lenders think it has 2 kitchens (it doesn't sound like valuers have visited)? Is that what you specified on an application form or similar?

If you did, I'd have thought your mortgage advisor would have warned you in advance about the dangers of doing that.


Edit to add...

It sounds like you're saying the EA's description says "second kitchen". That seems like an amateurish mistake for an EA to make.

They should know that a mortgage valuer is likely to read the EA's description, and that a second kitchen is likely to be a red flag for a mortgage lender.

You should suggest to the EA that they change the property details.

G_M

This is often an issue for lenders.

I have a granny annexe genuinely built by the previous owners for 'granny'. Separate entrance from garden; bed-sitting room (now called 'artist's studio'!); bathroom; and kitchen.

I'm removing the cooker, and replacing the wall socket marked 'cooker' with a double plug, and calling the 'kitchen' an artist's utility room.

With luck, my executors when the time comes will be able to sell without too much trouble....... :dance:

Cakeguts

I would want to look at the planning permission for these two cottages to be converted into one house.

jimbo1986

The EA has listed that the current owners often let out the annex using AirBnB and we considered doing the same from time to time for some extra cash.

We mentioned this to our financial adviser and I think she has either mentioned to the lenders that there is an annex we will be letting out or that there is a second kitchen...

As a result nearly all of the lenders have declined to offer us a mortgage.

My question is, is the fact we have a potential annex the reason they are declining or the request to let out the annex from time to time?

I have asked the adviser to go back and explain it is not a kitchen (no cooker point) ...(I am 80% certain that a survey will agree with us on this) and also that we will not be letting out.

If the lenders do indeed look at the listing from the EA, then perhaps we should ask them to fix this, they admitted the floor plan was inaccurate in describing it as a second kitchen.

The current owners have had the property inspected by the council and do not pay 2 lots of council tax on the property.

jimbo1986

After discussion with our adviser, we will go ahead with the lenders free survey and just hope they deem the second kitchen to in fact just be a utility space... Watch this space.

CIS

The current owners have had the property inspected by the council and do not pay 2 lots of council tax on the property.

I'd be cautious with this. It is not the council's decision though, the valuation office agency are the ones to make the decision.



I'd be surprised if it would not be banded individually by the valuation office agency if it is capable of separate occupation, which it appears it is.