Trying to buy the house next dor

Louise129

Advice on what type of mortgage as lenders seem reluctant to lend on 'next door' properties 

pinkteapot

Some lenders have a blanket 'no'. The concern is that you're going to knock through and create one property. Your options are to ring round lenders and see who's happy to lend on a house next door, or use a mortgage broker instead of going direct as they'll handle that for you (and may already know the answer).

I'd go with the latter and just use a broker - I did the same a few years back for a non-standard application (I was in a contract role, not a permanent job).

You might get more replies if you post on the mortgages board as there are brokers that hang out there. 

freesha

pinkteapot said:

Some lenders have a blanket 'no'. The concern is that you're going to knock through and create one property.

Forgive my ignorance, but why would this be a problem for them?

davidmcn

freesha said:

pinkteapot said:

Some lenders have a blanket 'no'. The concern is that you're going to knock through and create one property.

Forgive my ignorance, but why would this be a problem for them?

Because of the risk that they end up trying to repossess (1) a building site, and/or (2) half a house (because their charge only covers one of the old houses).

Gycraig

freesha said:

pinkteapot said:

Some lenders have a blanket 'no'. The concern is that you're going to knock through and create one property.

Forgive my ignorance, but why would this be a problem for them?

A 2 bed house isn’t necessarily  half the price of a 4 bed. 

So say they lend you 200k for a house and you know it through the new house could be worth less than the 2 houses you knocked into one. 

eddddy

Louise129 said:

Advice on what type of mortgage as lenders seem reluctant to lend on 'next door' properties 

What are your plans for the house next door?

If you plan to rent it out, you'd want a BTL mortgage.

If you plan to convert 2 houses into one, that would be a development project. You don't generally get standard mortgages for development projects - because they tend to be higher risk.

In theory, you could use short term 'development finance' to fund the development project, and once the house is finished, you could then apply for a standard residential mortgage.

The challenge would be that 'development finance' is expensive, and if you have no track record of development projects, the lenders might be very nervous of lending to you.

Ditzy_Mitzy

Gycraig said:

freesha said:

pinkteapot said:

Some lenders have a blanket 'no'. The concern is that you're going to knock through and create one property.

Forgive my ignorance, but why would this be a problem for them?

A 2 bed house isn’t necessarily  half the price of a 4 bed. 

So say they lend you 200k for a house and you know it through the new house could be worth less than the 2 houses you knocked into one. 

Plus two semis knocked together don't equal a nice four to five bed executive detached.  I've been in a number of different amalgamated houses, not lived in but stayed in and visited, and they raise all sorts of problems: the principle one being that it's very difficult to convert two houses to one.  Some semis have a central supporting wall which can be fitted with doors but, generally, has to remain.  This does away with the possibility of large rooms in the middle of the house and a central front door.  Instead one ends up with a left hand half and a mirrored right hand half, with two of everything.  Some people might want two kitchens and two dining rooms, but in the main one ends up with all sorts of redundant stuff including two staircases, two landings, double loft hatches and so on.  There's a lot to keep clean and keep track of.  Ditto services: one's amalgamated semi will have two boilers, two separate central heating systems, two electrical systems including meters and segregated ring mains, two gas meters, two water meters, two entirely separate sets of plumbing and sewage pipes, two drains, two telephone lines and, potentially, six to eight separate utility accounts. 
One could, if one wanted, gut the shell completely, install the necessary bracing structures in the roof and walls, and start from scratch but it's just easier, by that point, to knock both semis down and purpose build a single, larger detached dwelling. 
Then there's the issue of selling in future.  It's possible, if drastic conversion action isn't undertaken, to split the house back in half and sell it as two semis.  That's likely to be the simplest way, but it requires the semi to be left, at amalgamation stage, in a convertible state.  This means retaining all the stuff one doesn't need such as right and left hand staircases, central walls and so on.  It's not really possible to do things to make the house feel like a single large property rather than two small ones.  One would also have to poke up with the twin fuse boards, boilers and whatever else mentioned.
It's one of those things that doesn't really work in practice and I imagine that's why the lender isn't interested.  It's not going to want to repossess something that complicated.  Perhaps it might be better to see about loans for development and think about demolishing the two semis?  Although the local authority might not like it as a residential address will be removed from the council ward.

AdrianC

Ditzy_Mitzy said:

Plus two semis knocked together don't equal a nice four to five bed executive detached.  I've been in a number of different amalgamated houses, not lived in but stayed in and visited, and they raise all sorts of problems: the principle one being that it's very difficult to convert two houses to one.

This is very true.

Some years ago, there was a house down the road from where we then lived, which was being massively extended in all directions.
Work stopped.
A planning app went in to convert it to two semis. It was rejected.
Work restarted.
Eventually, it was finished as a very expensive four-bed detached... and they had an open day. Well, it'd be rude not to, right?

The layout was just WRONG. It did not work. It made precisely zero sense - until you remembered that rejected planning app... Then, it made perfect sense.

pinkteapot

OP took my advice and posted on the Mortgages board. Bit more context in that post about what they're doing: 
https://forums.moneysavingexpert.com/discussion/6218746/trying-to-buy-the-house-next-door-need-mortgage-advice#latest 

Louise129

So this property was originally converted as one house in a barn conversion, the original buyer died and the builder submitted amended planning and split it in two, making two affordable houses rather than one large one. Only blocked up connecting doorways in the middle (lintels etc still on place as we've investigated from our side of the house). Obviously installed another open staircase in the house thats now for sale. (Easily removed) The proportions are currently 2 thirds  of original property is ours, 1 third  is for sale. Therefore, it would be a simple  knock through as the doirs are in exactlytheright place. The electric supply is back to back with ours as is the water etc, so nothing major. A few minor superficial updates  in the 'for sale' house to make it one property.

davidmcn

Louise129 said:

So this property was originally converted as one house in a barn conversion, the original buyer died and the builder submitted amended planning and split it in two, making two affordable houses rather than one large one. Only blocked up connecting doorways in the middle (lintels etc still on place as we've investigated from our side of the house). Obviously installed another open staircase in the house thats now for sale. (Easily removed) The proportions are currently 2 thirds  of original property is ours, 1 third  is for sale. Therefore, it would be a simple  knock through as the doirs are in exactlytheright place. The electric supply is back to back with ours as is the water etc, so nothing major. A few minor superficial updates  in the 'for sale' house to make it one property.

None of that is really going to make a difference to the lender's attitude.