Residential Mortgage with linked mixed-use property

se2020

Hi,

Looking to purchase a cottage with land.
The original sales listing was for the lot at £450k or in 2 lots, cottage £350, land £100

Offer accepted at £450k

It turns out there is an overage clause against the land and no mainstream lender will offer a mortgage due to this.

I am in a position to pay cash (£100) for the land and would then need a 80% mortgage for the cottage.

My solicitor has informed me I do not qualify for FTB relief on SDLT as these will be classed as linked transactions and, for sdlt, it is a mixed use property.

Is there any reason  why the cottage would not be mortgage on a standard residential mortgage?

I presume the mortgage provider may ask or need to be told about linked transactions but is it actually going to be an issue?

Thanks!

user1977

Is the land attached to the cottage? Lenders may be reluctant to take a charge over only part of the property you're buying. Probably less of an issue if it's a field remote from the house/garden.

se2020

user1977 said:

Is the land attached to the cottage? Lenders may be reluctant to take a charge over only part of the property you're buying. Probably less of an issue if it's a field remote from the house/garden.

Yes.
The garden is fenced and clearly designated but the field runs alongside 2 edges of the garden.

I would be happy for the lender to have a charge against the land as well but no lender will mortgage the land due to the overage.

I suppose the lender could have a second charge on the land if that would help in any way?

user1977

Possibly too complex for a normal lender to get involved. What they want to avoid is you somehow developing the land in a way which straddles the boundary between the mortgaged and unmortgaged bits, and leaves them repossessing e.g. half a house.

se2020

The frontage of the house does run alongside a road so it has its own independent access. 

Do they assess them individually at survey or is it just blanket policy?

If it's not something a normal lender would accept then it may be easier to find a specialist lender that will accept the overage and just mortgage the property and land as a whole 

MWT

Are there 2 titles already, or is the cottage and land one one title at the moment?

se2020

MWT said:

Are there 2 titles already, or is the cottage and land one one title at the moment?

One title at the moment.
The overage only applies on the land part, cottage and garden area are not included in that.