Mortgage on a house with a granny annexe

LookingForLondon

I know this question has been asked and topic discussed at length before, but I can’t find a discussion exactly related to our intentions.

We are interested in purchasing a large house, with a mortgage, which has had the lower ground floor converted into a separate annexe for a family member, with kitchen, bathroom, bedroom and lounge. The staircase from the main house has been removed and access is from a different entrance totally separate from the main house.

I’ve seen a number of properties like this that have managed to sell, but I understand that mortgage lenders don’t particularly like to lend on properties with two kitchens or separate annexes (which I think might require it’s own council tax - I haven’t asked the estate agent).

Our intention for the property would be to renovate the whole thing, join the basement back with the main house and extend the basement into the garden. We would use this basement floor as our kitchen and remove the other kitchen upstairs. We would probably live in the property for a few years before doing this and in the meantime most likely use the annexe as a working from home space. We have no intention of renting it out, not least because we would need to go in regularly to plan for the extension and renovation. 

We would be happy to put in a temporary staircase and remove the second kitchen straight after moving in if required, but given the additional work of putting in a staircase we doubt this would be done before the actual completion takes place and we own the property. We are not keen on using a bridging loan.

Are there any lenders that would be happy to lend in this scenario? I think our preferred lender would be Barclays but they state In their policy that this sort of case would need discussion with an adviser. I see in another case that Metro Bank state in their lending policy that granny annexes are acceptable if used by a dependant family member, but we would be leaving it empty. Would that still count?

Many thanks for any advice that can be shared

Mickey666

LookingForLondon said:

I know this question has been asked and topic discussed at length before, but I can’t find a discussion exactly related to our intentions.

We are interested in purchasing a large house, with a mortgage, which has had the lower ground floor converted into a separate annexe for a family member, with kitchen, bathroom, bedroom and lounge. The staircase from the main house has been removed and access is from a different entrance totally separate from the main house.

I’ve seen a number of properties like this that have managed to sell, but I understand that mortgage lenders don’t particularly like to lend on properties with two kitchens or separate annexes (which I think might require it’s own council tax - I haven’t asked the estate agent).

Our intention for the property would be to renovate the whole thing, join the basement back with the main house and extend the basement into the garden. We would use this basement floor as our kitchen and remove the other kitchen upstairs. We would probably live in the property for a few years before doing this and in the meantime most likely use the annexe as a working from home space. We have no intention of renting it out, not least because we would need to go in regularly to plan for the extension and renovation. 

We would be happy to put in a temporary staircase and remove the second kitchen straight after moving in if required, but given the additional work of putting in a staircase we doubt this would be done before the actual completion takes place and we own the property. We are not keen on using a bridging loan.

Are there any lenders that would be happy to lend in this scenario? I think our preferred lender would be Barclays but they state In their policy that this sort of case would need discussion with an adviser. I see in another case that Metro Bank state in their lending policy that granny annexes are acceptable if used by a dependant family member, but we would be leaving it empty. Would that still count?

Many thanks for any advice that can be shared

The previous owners of my house had a mortgage and the granny annexe had variously been left empty, rented out commercially to someone outside the family and later lived in for free by a dependent relative.  I suspect they simply didn;t inform their mortgage company of any changes.

As for leaving it empty, I'd argue that's just the same as you using it as part of your home and therefore wouldn't even mention it.  Use it as storage for all your boxes when you first move in.

I know mortgages have all sorts of conditions in the small print but I also think that many people obsess over them too much.  Ultimately, mortgage companies care about only one thing and that's regularly receiving their monthly payments on time.  Do that and you'll never hear from your mortgage company and they'll certainly not be coming round to check how you're using the house.   But of course you'll never get a professional admitting any of that in case any issues become their responsibility, so you have to take responsibility for your own decisions.

Thrugelmir

A mortgage lender will base their decision on the property at time of application. People aren't always honest with regards to their intentions. 

K_S

@lookingforlondon Generally speaking -Assuming the property is on a single deed, there are mainstream lenders who will consider. If on two deeds, the pool of lenders might be smaller. In all cases it will be subject to valuer comments and things that may come during conveyancing.

Usually, no two properties with annexes/outbuildings are the same so lenders will not usually pre-guarantee than the property will meet criteria. 

Mickey666

Thrugelmir said:

A mortgage lender will base their decision on the property at time of application. People aren't always honest with regards to their intentions. 

. . . or circumstances may change over the term of the mortgage such that people's intentions may change.