Buy the remaining flat in a 2-storey mid-terrac house

ThisIsWeird

proformance said:

My neighbour two doors down has done the same thing - bought the upstairs property and in the throes of converting to a single dwelling, so I don't think PP will be an issue.

It doesn't sound like a cost-effective solution though? 

I wondered if there'd be any financial upside in doing this, versus buying a (theoretically) the same property (same value assumed), but I guess not? 

Cons:
1) because the development financing sounds expensive 
2) because of the PP and actual development costs (to convert) 
3) possible PP headache 

Pros:
1) less stamp duty as we'd only be buying half the property versus stamp duty on a 2 storey 
2) no moving costs 


To summarise, nobody thinks that this is a financially beneficial idea? And unless wedded to the property/area, there is no financial or other upside in doing so? 

It could make sense, but we can't tell from this side of the screen. But it should be pretty easy to determine, I'd have thought - you know how much the two flats are worth separately, so compare that with what an equivalent house costs in your 'hood! 
The 'tricky' bit is making the comparison. For example, once you amalgamate the two, you'll only need one kitchen, so what will the other ex-kitchen become; a bedroom, a further reception room? Will you need all the bathroom/en-suites? If not, ditto.
So, how many bedrooms and reception rooms with this 'new' house have? That's the way to compare them.

proformance

ThisIsWeird said:

proformance said:

My neighbour two doors down has done the same thing - bought the upstairs property and in the throes of converting to a single dwelling, so I don't think PP will be an issue.

It doesn't sound like a cost-effective solution though? 

I wondered if there'd be any financial upside in doing this, versus buying a (theoretically) the same property (same value assumed), but I guess not? 

Cons:
1) because the development financing sounds expensive 
2) because of the PP and actual development costs (to convert) 
3) possible PP headache 

Pros:
1) less stamp duty as we'd only be buying half the property versus stamp duty on a 2 storey 
2) no moving costs 


To summarise, nobody thinks that this is a financially beneficial idea? And unless wedded to the property/area, there is no financial or other upside in doing so? 

It could make sense, but we can't tell from this side of the screen. But it should be pretty easy to determine, I'd have thought - you know how much the two flats are worth separately, so compare that with what an equivalent house costs in your 'hood! 
The 'tricky' bit is making the comparison. For example, once you amalgamate the two, you'll only need one kitchen, so what will the other ex-kitchen become; a bedroom, a further reception room? Will you need all the bathroom/en-suites? If not, ditto.
So, how many bedrooms and reception rooms with this 'new' house have? That's the way to compare them.

I admire the enthusiasm!

Hypothetically, let's go with the following numbers (which are supposed to be indicative of scale rather than the actuals):

1. For my existing 2br (ground floor) property (with garden)
1.1. Bought for £510k (mortgage)
1.2. Value of £520k

2. The 2br (1st floor) flat (above)
2.1. Value of £500k

3. Estimated 4br single dwelling 2-storey Victorian mid-terraced house in the neighbourhood (based on Purp Bricks estimate)
3.1. Value of £1.1m

4. Surcharge - according to a previous poster, there's a surcharge levied when another property mortgage is taken on.
4.1. Surhcgarge of £???
4.2. Additional stamp (on second first floor flat) of £???

5. Development costs
5.1 £50k

kimwp

proformance said:

ThisIsWeird said:

proformance said:

My neighbour two doors down has done the same thing - bought the upstairs property and in the throes of converting to a single dwelling, so I don't think PP will be an issue.

It doesn't sound like a cost-effective solution though? 

I wondered if there'd be any financial upside in doing this, versus buying a (theoretically) the same property (same value assumed), but I guess not? 

Cons:
1) because the development financing sounds expensive 
2) because of the PP and actual development costs (to convert) 
3) possible PP headache 

Pros:
1) less stamp duty as we'd only be buying half the property versus stamp duty on a 2 storey 
2) no moving costs 


To summarise, nobody thinks that this is a financially beneficial idea? And unless wedded to the property/area, there is no financial or other upside in doing so? 

It could make sense, but we can't tell from this side of the screen. But it should be pretty easy to determine, I'd have thought - you know how much the two flats are worth separately, so compare that with what an equivalent house costs in your 'hood! 
The 'tricky' bit is making the comparison. For example, once you amalgamate the two, you'll only need one kitchen, so what will the other ex-kitchen become; a bedroom, a further reception room? Will you need all the bathroom/en-suites? If not, ditto.
So, how many bedrooms and reception rooms with this 'new' house have? That's the way to compare them.

I admire the enthusiasm!

Hypothetically, let's go with the following numbers (which are supposed to be indicative of scale rather than the actuals):

1. For my existing 2br (ground floor) property (with garden)
1.1. Bought for £510k (mortgage)
1.2. Value of £520k

2. The 2br (1st floor) flat (above)
2.1. Value of £500k

3. Estimated 4br single dwelling 2-storey Victorian mid-terraced house in the neighbourhood (based on Purp Bricks estimate)
3.1. Value of £1.1m

4. Surcharge - according to a previous poster, there's a surcharge levied when another property mortgage is taken on.
4.1. Surhcgarge of £???
4.2. Additional stamp (on second first floor flat) of £???

5. Development costs
5.1 £50k

It's not a surcharge on having a second mortgage. It's that the stamp duty rates are higher when buying an additional property (+3% from memory)

user1977

SDLT would be £27,500 buying a £500k property as a second property, £51,250 on a £1.1m property as a replacement home.

knightstyle

Some friends did just this years ago.  They each bought one of the flats separately with mortgages and reconverted the building to be one 5 bed property.  They never told the mortgage companies till some yesrs later when they got a new mortgage for the whole property with another company.
Worked well for them but not sure on the legalities of doing this.

proformance

knightstyle said:

Some friends did just this years ago.  They each bought one of the flats separately with mortgages and reconverted the building to be one 5 bed property.  They never told the mortgage companies till some yesrs later when they got a new mortgage for the whole property with another company.
Worked well for them but not sure on the legalities of doing this.

Wow - that is very brave!! Wouldn't questions arise though? At some point Land Registry would need to be informed, I'd have thought - not to mention the survey.

Interesting nonetheless though!