Financing purchasing next door to knock through?

Beckyy

Could anybody shed some light on how possible it is to finance the purchase of a neighboring property, with the intention of knocking it into one please? (in Scotland if relevant)

Our neighboring property is currently empty after it's long term tenant vacated, they were a hoarder and the property is in a grim state in places. The 2 properties used to be one historically, and we would love to purchase it to return it to one home - I'm not concerned about it potentially being worth slightly less than 2 separate properties as long as it was feasible to do or being a massive project as it would be the 'forever home'.

My concern is, work costs aside, we would need to free equity from our current home for a deposit. Currently own 65% and mortgaged with B arclays, 17 yrs remaining. Assuming neighouring property would be sold as is at a price to reflect current state, I'd expect some recommended retention on a mortgage offer based on condition. If possible to free up deposit, would we need to take out a mortgage as a 2nd home (limited to current provider possibly?), then once relevant permissions were sought etc. approach them to combine or remortgage the 'property'? 

We would be looking at freeing up minimum 30% our current home's equity (income req should be okay, I think) and probably request to increase our term (we're nowhere near retirement), which would give us a 20% deposit and some cash for initial repairs, would intend for a 30 year term on both ideally. The project itself could be done veryyyy long term, no particular rush.

davidmcn

You'd need consent from current lender to do any significant building work, let alone knocking through to next door, and they are likely to be concerned about the risk of you running out of cash and they end up repossessing an uninhabitable building site (or even worse, one half of it!). You might need more specialist development finance.