Will a lender approve a morgage where a property layout hasn't been completed yet

strevor

Hello, currently renting in a merged semi detached house 18-20 house number for example. We are looking to purchase one side of the house (18). The property is requiring planning permission to put the dividing single wall linking the properties back in place and then re-banding for council tax so they become 18 and 20 separately. This is all dependant on if the mortgage is approved that the work can go ahead to split the two. The lender is sending a surveyor for valuation purposes next week. Is this likely to be declined because the physical work hasn't been carried out yet and if I explain to the surveyor the plan of action if the mortgage is approved, to which we have floor plans of the changes submitted to planning permission for this simple internal change. I hope someone can advise. Thank you in advance

MWT

I wouldn't have thought you are likely to get a residential mortgage on half of an as yet undivided property that is also without planning permission for the change.

Even with planning permission it sounds like you are in development finance territory until the work is completed.

Are the land titles still separate from before the houses were merged?

ACG

I do not know the answer, but I would say if you can currently walk freely between the 2 properties you have no chance of a conventional mortgage.

If the wall is in place (with no doors) between the 2 properties, it still might not be for every lender but I would like to think some lenders would do it and just put a condition in the mortgage offer preventing completion until everything is in place. 

strevor

MWT said:

I wouldn't have thought you are likely to get a residential mortgage on half of an as yet undivided property that is also without planning permission for the change.

Even with planning permission it sounds like you are in development finance territory until the work is completed.

Are the land titles still separate from before the houses were merged?

Thank you. The land titles are still as separate properties. Not sure if that helps the lender to confirm things

davidmcn

strevor said:

This is all dependant on if the mortgage is approved that the work can go ahead to split the two. 

Do you mean you actually need the funds from the mortgage before you can carry out that the work? That isn't going to happen (not for a standard residential mortgage anyway).

Or do you just mean that you want to have a mortgage offer before you carry out the work, and the mortgage will be drawn down after completion of the works? That shouldn't be a problem, in principle - after all, you can get mortgage offers for properties which haven't even been built yet.

MWT

strevor said:

MWT said:

I wouldn't have thought you are likely to get a residential mortgage on half of an as yet undivided property that is also without planning permission for the change.

Even with planning permission it sounds like you are in development finance territory until the work is completed.

Are the land titles still separate from before the houses were merged?

Thank you. The land titles are still as separate properties. Not sure if that helps the lender to confirm things

It helps to the extent that it isn't an immediate 'no' on its own.

Will be interesting to hear the reaction from your lender, but I suspect that if the properties are divided at the point when the valuation occurs you'll get a zero value report if you've applied for a standard residential mortgage...

Have you warned the lender of the current sitution already? It would be a pity to waste the time if the answer is an immediate 'no'.  

strevor

davidmcn said:

strevor said:

This is all dependant on if the mortgage is approved that the work can go ahead to split the two. 

Do you mean you actually need the funds from the mortgage before you can carry out that the work? That isn't going to happen (not for a standard residential mortgage anyway).

Or do you just mean that you want to have a mortgage offer before you carry out the work, and the mortgage will be drawn down after completion of the works? That shouldn't be a problem, in principle - after all, you can get mortgage offers for properties which haven't even been built yet.

That's correct, we want to have the mortgage offer before carrying out the work and then complete this physical split before drawing down the mortgage. The mortgage isn't for the funds to make the changes. This is only a single brick internal wall that connects the two semi detached houses just over 2 metres wide, so its not an expensive piece of work to take place and shouldn't take long once planning permission is approved. The LA were very helpful as we didn't realise planning permission was required initially as we were putting two properties back to their initial state, however because it is a change in the number of dwellings, this is required. We also want to make sure the council tax banding is then correct re-banded for each property. 

I have informed the Morgage Broker before we proceeded with the Bank, however we didn't know planning permission was required at that point and believed the LA would simply split it on records based on the Deeds already showing them as two properties. I have recently contacted the broker to let the lender know of this and if they are happy to proceed or put a pause in the process while we split the property after planning has been approved. The last thing I want is to be declined based on something that I could have easily fixed. Thank you