Can you refurbish your house with a residential mortgage?

pieroabcd

Hi,
the title says it all: if I plan to buy a freehold house with a residential mortgage, what's the procedure to follow if I want to refurbish it?
Do I have to make it clear from the start (before the actual purchase) with the lender? In this case do I still need a residential mortgage or a different type? I've read of strange mortgages that are added on top of residential ones, but I don't understand if they are needed only for flips intended to resell as soon as the house is renovated.

If I want to move in, then refurbish 1-2 years after the purchase, do I have to seek permission from the lender before renovating and/or change the ongoing mortgage?

Thanks

Soot2006

You can refurbish to your heart's desire on your residential mortgage (subject to PP/BR as needed). 

K_S

@pieroabcd As long as the house is habitable and structurally sound, you should be able to get a standard resi mortgage to buy it.

Once you own it, you can do pretty much whatever refurbishment you want to as long as it's not commercial or major development (splitting a house into flats, demolishing a significant part, change of use, etc.). 

Depending on what exactly it is that you are doing and what stage it is at, you may find it difficult to remortgage the property (change lender or borrow more) during the refurb.

pieroabcd

Say for example that I wanted to knock down the wall between one bedroom and the dreaded (by me) boxroom, adding a steel beam (or 2, whatever is needed) to support the weight of the overstanding floor/roof. All subject to PP and BR, of course and with the help to a structural engineer. 
No change of destination.
Would I need to seek permission from the lender?

K_S

@pieroabcd I wouldn't expect so, but policies may differ across lenders.

eddddy

pieroabcd said:

Say for example that I wanted to knock down the wall between one bedroom and the dreaded (by me) boxroom, adding a steel beam (or 2, whatever is needed) to support the weight of the overstanding floor/roof. All subject to PP and BR, of course and with the help to a structural engineer. 
No change of destination.
Would I need to seek permission from the lender?

You wouldn't normally need permission from your lender - and realistically, they've have no way of finding out you'd done it anyway.

But just to be clear, your mortgage lender wouldn't take your planned refurbishment costs into account when valuing the property and offering you a mortgage.

As an example, if...
- You are buying a house for £200k
- You are planning to spend £20k on refurbishment
- You want an 80% LTV mortgage product

The max mortgage would be 80% of £200k (or the valuation, if lower) - you'd have to find the £20k for refurb from somewhere else - e.g, your savings.


And tbh, even if you applied for a remortgage with a re-valuation after knocking down the wall - typically, valuers don't value any higher as result of that kind of thing.

pieroabcd

eddddy said:

pieroabcd said:

Say for example that I wanted to knock down the wall between one bedroom and the dreaded (by me) boxroom, adding a steel beam (or 2, whatever is needed) to support the weight of the overstanding floor/roof. All subject to PP and BR, of course and with the help to a structural engineer. 
No change of destination.
Would I need to seek permission from the lender?

You wouldn't normally need permission from your lender - and realistically, they've have no way of finding out you'd done it anyway.

But just to be clear, your mortgage lender wouldn't take your planned refurbishment costs into account when valuing the property and offering you a mortgage.

As an example, if...
- You are buying a house for £200k
- You are planning to spend £20k on refurbishment
- You want an 80% LTV mortgage product

The max mortgage would be 80% of £200k (or the valuation, if lower) - you'd have to find the £20k for refurb from somewhere else - e.g, your savings.


And tbh, even if you applied for a remortgage with a re-valuation after knocking down the wall - typically, valuers don't value any higher as result of that kind of thing.

Sure, these are all things that I had already assumed.
Thanks everybody!

hazyjo

Be careful you don't devalue your property though. Turning a 3 bed into a 2 bed (or whatever) will prob knock off value. That box room, unless minute, is pretty bog standard and expected in many houses and fine for a spare or kid's room.

Silvertabby

hazyjo said:

Be careful you don't devalue your property though. Turning a 3 bed into a 2 bed (or whatever) will prob knock off value. That box room, unless minute, is pretty bog standard and expected in many houses and fine for a spare or kid's room.

As hazyjo says.  The smallest houses on our estate are 3 bed semis, and friends who bought one took down the dividing wall between  the main bedroom and the smallest room.  They also filled in the 'spare' door, thus making restoration back to 3 bedrooms more difficult.

When they came to sell, their house went for 15% less than a similar - but 3 bed - house a few doors away.

pieroabcd

Thanks for the advice.
Adding back the boxroom with some plasterboard would be easy, if I wanted to resell it after some time. On the other side having a boxroom  would be an absolute nightmare for me while i lived there .

getmore4less

Depending on layout you could be more creative than just knocking down a wall.

What benefit from making the bigger room even bigger?

eg. Could set it up as a walk in wardrobe with or without a new door into the main room.
(converting back very easy if done using stand alone fittings)

Creates more space in the main room removing the need for clothes storage might achieve what you need /want

We use ours as a office space so none of that stuff needs to be elsewhere in the house.