Advice on legalities of building external bedroom in parent's garden to act as future revenue stream

blazingl

Hello,

I've just graduated and have moved back into my family home in Birmingham during Covid, and am now considering staying here sei-permanently so I can avoid renting and save up some money. The house no longer has a mortgage and has been fully paid off.

We are considering knocking down the 28sqm external garage in the garden as it is in a poor condition, and building a similar sized building which would act as a long open-plan space (8m x 3.5m) which would contain a bed at the end, a lounge area in the middle, and an ensuite so that I could live there to maintain my own privacy (or my other siblings if they choose to remain in Birmingham), whilst still allowing me the benefits of living at home and continuing to use the main house and kitchen. This is with the view that the outbuilding would appreciate the value of the property, which will be left to my siblings and I once my parents pass away, thus acting as a form of investment for the whole family, and as a place to stay for us without having to share a roof with my parents. It would have electric connection through the main property, underfloor electric heating, and an electric shower so that it doesn't need its own boiler.

My parents are not particularly well-off (only one is employed) and do not have pensions, so whilst I stay in this outbuilding I would contribute towards paying bills and food to help out my family to give them some financial stability.
However, I don't necessarily plan to stay in Birmingham forever, and would like the ability to move out (e.g. to London) once I have a higher earning power later in my career, and so it may be the case that the outbuilding is empty in the future if my siblings are not there either.

Would my parents be able to rent/let this outbuilding to someone in this scenario, so that it can act as a revenue stream for them even when neither me nor my siblings are living there and helping with the bills, or are there legal issues which would prevent them from doing so if that person was not a family member?

My understanding of the situation is that since the building wouldn't have its own kitchen and would therefore share a kitchen with the main house, this would make it ancillary to the house and therefore the outbuilding would be classed as an external room and not as an 'annexe'/self-contained dwelling which would be liable for separate council tax. Does this mean that it could be rented out under the rent-a-room scheme, as opposed to an annexe, or would it not be allowed to be rented out at all?

Are my assumptions correct, or will a building with a bedroom/lounge/en-suite attract council tax and/or be un-rentable?

Thank you in advance for your replies! I'll happily answer any questions!

Doozergirl

I think you're trying to suggest that the building is 'incidental' (dependent on the main house).  That would fall under permitted development.   People living in an 'incidental' building puts it straight into the 'ancillary' category, imo.  

A granny annex is ancillary (not dependent on the main house) and requires planning permission.    They cannot be let or sold separately to the main dwelling. 

I don't think that a planning enforcement officer is going to accept that a building where someone lives in the garden and just coming in to the main kitchen is 'incidental' when it will have a shower room, bed, tv and personal effects.  You only need a kettle and microwave to be totally self sufficient of the main dwelling, and arguably not even that.  

What you describe is slang named a 'bed in a shed' and is likely to be frowned upon.  That said, if you did gain planning permission for it, it would have a separate council tax banding. 

Either way, it would need to meet building regulations.  Do you know how much it costs to build something compliant?  It's not cheap, which is a barrier to those on a low income in the first place.  

Councils, in general, don't want tenants living in poor standard housing in back gardens...

FreeBear

Doozergirl said: Either way, it would need to meet building regulations.  Do you know how much it costs to build something compliant?  It's not cheap, which is a barrier to those on a low income in the first place. 

At an absolute minimum, a budget of ~£30K is going to be needed, perhaps as much as £50K - For that sort of money, you could buy a two bed terrace (three in the Birmingham area on Rightmove in that price range).

Should your parents need care in their final years, your "inheritance" would go to pay for the bulk of that, so don't count on owning the place in the future.

greatcrested

Cost of surveyor and builder.

Planning Permission.

Building Regulations.

Also check the deeds. It's unlkely but just possible there's a covenenat that might apply.

Any non family occupant would almost certainly be a tenant, not a lodger. Big legal distinction. Read the stickie at the top.

Longer term, worth looking at /considering costs of care for the elderly.

davidmcn

Also consent from the lender may be required (for the works and/or any letting) if they have a mortgage.

UnderOffer

davidmcn said:

Also consent from the lender may be required (for the works and/or any letting) if they have a mortgage.

“The house no longer has a mortgage and has been fully paid off”. OP mentioned this in their post. 

Scotbot

Not to mention tne cost of compliant sewage and drainage facilities 

davidmcn

UnderOffer said:

davidmcn said:

Also consent from the lender may be required (for the works and/or any letting) if they have a mortgage.

“The house no longer has a mortgage and has been fully paid off”. OP mentioned this in their post. 

Fair enough. Though would also be a consideration for any future mortgages (including when they come to sell), as lenders can be awkward about annexes.

lincroft1710

About 20 yrs ago I was contemplating building a "granny annex" in my back garden. Although it may have been slightly larger than the one OP is proposing as it would have had a kitchen, the architect suggested a total building cost of £60,000. It certainly would not have increased my home's value by anywhere near that amount.

Not having its own kitchen would make it less desirable as somewhere to be rented out, I would have thought potential renters either want a room in a house, or somewhere self contained, rather than a room in a back garden. An annex either self contained or otherwise will limit the market when you come to sell and if people want a house with a non attached annex they usually want one that is self contained.