Switching part of mortgaged property into cafe - issue with lender?

LeicesterTerrace

Annisele said:

OK, I take back my agreement to the heart ruling the head comment, apologies. I still think you haven't thought all of this through yet - but you also haven't started doing anything yet, and clearly the point of this post is to help with the thinking.

You initially just asked about the mortgage, and I don't have anything to add to what's already been said about that. I think the key thing is going to be the valuations, and there's not much point in speculating until you get them. But just in case this isn't already on your radar - you understand the tax consequences of splitting the title / using part of your land for commerical purposes? I don't know exactly what those consequences will be, and they depend in part on exactly what you decide to do, but there will be some consequences.

I appreciate all of your points. Many thanks, I shall take these on board. Apology, albeit unnecessary, accepted. 

I'll look into the tax stuff too, although, with the hostel business and previously being a Financial Planner, I already have an idea. 

getmore4less

With the hostel presumably closed a good time to be investing the time in forward planning and developing new options.
A few pubs/restaurants near us have done well during the shutdown expanding into takeaway and delivery from local producers and their own products.

With Wales reopening accommodation soon how much time will the hostel take up to restore business to an acceptable(profitable) level if each room can only take one household/bubble for some time, might this cafe project need to be a slow burner if too busy?

Probably going to be more popular than normal years as anywhere with good outdoor access activity will be high on people getaway list. 

if the tourist traffic is seasonal then having a cafe with community connections can keep it going all year round and if the community is mainly tourst they are busy when the tourist are around so complementary loads

[Deleted User]

You just have to ask the lender if they allow it. In my experience, some are happy to do it subject to you paying for them to send a valuer out to value with the expected boundary in place. Some wont consider and then you have to wait and remortgage to a different lender. 
When you come to remortgage you can just tell them that the boundary is different then previous and they can send a valuer out to value based on the new boundaries.  

Its not hugely complex but will depend on if the lender even allows it at all. A very black/white process for them.   I have done this a few times for people wanting to create a plot with their garden to build another house.  

If youve got the lenders approval to value the property then its just getting the valuer to agree that it fits lenders criteria on being next to commercial premises.  If it doesn't then you remortgage to a lender who does allow being next to commercial 

Call the lender and ask,  if they dont allow it then remortgage to a lender that does