Desperate help, please! Mortgage for annex property with council tax issue

Peas83

Hi all,

We're really hoping you can help as we are about to lose our dream 1st family home.

We have had an offer accepted and have had surveys done and our now going for our mortgage but our advisor is saying no lenders will touch the property as it has a separate annex/chalet and there is a risk of subletting.

The chalet unfortunately has its own council tax band but is not on separate deeds nor separate services. It is currently let out but we planned to use for grandparents and as extra storage.

A large percentage of the purchase price is via deposit and we have had a general mortgage in principle for 140k.

Is there anyone who can advise, perhaps we are unlucky and our current advisor seems to have no experience of this as he never mentioned it. Nor did anyone else in the loop, estate agents, surveyors, solicitors, vendor etc. I appreciate its not their job per se.. But I'd have thought someone would have encountered it and thought to mention as all were aware we needed a mortgage.

I will provide any other info, just ask and I'll do my best to answer. We are so disappointed and really hope there is someway we can still make this property work.

Thanks in advance for any and all help.

martinthebandit

Peas83 wrote: »

......It is currently let out but we planned to use for grandparents and as extra storage.

Are you asking for a buy to let mortgage?

As a general rule of thumb never, ever put an offer in for a property that has a sitting tenant unless you plan on becoming a landlord.

Peas83

No, residential mortgage as we are going to live in the main house. The chalet is literally that, a small timber shed/chalet.

The current vendor was/is happy to give notice to chalet tenant once we had mortgage in place.

Like I say, we had no interest in letting out the chalet once the property was ours...

martinthebandit

Peas83 wrote: »

No, residential mortgage as we are going to live in the main house. The chalet is literally that, a small timber shed/chalet.

The current vendor was/is happy to give notice to chalet tenant once we had mortgage in place.

Like I say, we had no interest in letting out the chalet once the property was ours...

.......and is the tenant happy to move out? Will they have found somewhere to move to by the completion date?

Even if you are happy with the answers I bet your mortgage co won't be.

Peas83

From what we are aware the tenant is accepting of the situation, I don't know if they are necessarily happy.

Like I said, notice (standard 8 weeks) was due to be given once we had mortgage in place. Our solicitor is also a specialist in lettings and was happy with the situation, that it shouldnt prove to be an issue. From the advice we were given, lenders would have been fine so long as they had a 'leave date' for the tenant.

We've also been told that there would be no chance of a mortgage with vacant possession so it's not like we could keep the current tenant, even if we did wish to let it out.

Is there some kind of split mortgage possibility? Incorporateing the chalet as a but to let but the house residential?

It seems odd, surely properties with annexes, second dwellings must get sold all the time (tenanted or not), they can't all be cash purchases can they?

ACG

I am sure there are a couple of lenders who will consider this, I have no idea who they are. You probably need a broker who has experience of this type of case or is prepared to put the work in to find a lender for you.

You might need to be prepared for a higher interest rate however.

Peas83

We are happy with a higher rate to secure the the property. Yes, that's what we're hoping someone can help with, either sympathewlendwrs or experienced brokers as it seems our advisor hasnt encountered this before...

davidmcn

martinthebandit wrote: »

.......and is the tenant happy to move out? Will they have found somewhere to move to by the completion date?

Even if you are happy with the answers I bet your mortgage co won't be.

All the lender will care about is that the property is vacant at completion. How and when that is achieved is up to everyone else.

BoGoF

The position you have is that you are having to take vendors word that the sitting tenant is 'accepting of the situation'. That means nothing. If the tenant has any idea what rights they have then they will know that the only thing that can force them out is a court order and that can be a long process.

martinthebandit

davidmcn wrote: »

All the lender will care about is that the property is vacant at completion. How and when that is achieved is up to everyone else.

......and you can't even exchange contracts until the lender is happy it will be vacant at completion and the only way to ensure that is for it to be vacant at exchange of contracts.

davidmcn

martinthebandit wrote: »

......and you can't even exchange contracts until the lender is happy it will be vacant at completion

No, the lender isn't a party to the contract.