Mortgage, 2 titles, potential AirBnB/let

struthers1985

Hello,

I would be grateful for some advice. We have seen a house we like and it has an attached annex (separate kitchen and bathroom). The house is being marketed as a single property but it has two title numbers.

The agent has said that the value of the annex is about 21% of the value of the main house (in case that is helpful to know).

We will need a mortgage and we can apply for 50% LTV. But we would like to AirBnB (or let) the annex.

Our mortgage broker has said that our only option is to buy the annex outright (cash) and then get a mortgage on the main house. But the only lender who could help us with the two titles and the letting, would require a 50% LTV on the main house. We couldn’t afford this if we had to buy the annex outright.

Does anyone have any advice? The house has been on the market for a while and perhaps these mortgage issues explain why…

Many thanks.

Hoenir

struthers1985 said:

Does anyone have any advice? The house has been on the market for a while and perhaps these mortgage issues explain why…

The two seperate titles are the problem for potential buyers without the ready cash. Does the annexe have it's own  vehicle / pedestrian access to the public highway ? 

struthers1985

Thanks so much for your reply. Yes it has a separate drive. 

struthers1985

Sorry there was an (important!) typo - we would be applying for 40% LTV

kingstreet

For a lot of us, I suspect our first port of call would be NatWest. Criteria extract for you;-

Properties with an annex may be considered subject to valuer’s comments, where it is intended that a family member will reside in the annex or where this will be used as family staff accommodation e.g. live-in childcare arrangements. In addition to standard valuation requirements, the valuer will consider the following when assessing the property:

• Potential for letting: We can't lend on a property where the annex could be sublet on a permanent or temporary basis. 

• Access and service: An annex should normally share its access and services with the main residence. If these are separate the risk of the annex being sublet is increased and may result in the property being declined. 

• Size and nature: The annex should be secondary to the main residence. For example a 6 bedroom house with a 1 bedroom annex could be considered however a 3 bedroom house with a 2 bedroom cottage is likely to be unacceptable.  

• Buy to let: Where the property will be a buy to let, this can only be considered where there is likely to be sufficient demand from potential tenants who wish to occupy the whole property as a single- family residence.

There may be specialists prepared to consider the proposition and it will take time for a broker to ferret them out and work through the foibles with each one.

pramsay13

Is it not possible to get a separate buy-to-let mortgage on the annexe?

Hoenir

What has the EA said ? Presumably they made you aware of the facts when you were viewing the property. For all intents and purposes these are two seperate dwellings. Why won't the vendor sell them individually?