Remortgage to fund 2nd property

FtbDreaming

I really want to buy the house next door to me… ideally to have as a property for us to live in and expand. We would go from 3 beds to 6 and the land next door is amazing. We have 6 dogs so the more room the better! 

I currently owe £58k on my mortgage. I would say there £80-100k equity in the house. Next door are asking for £175k. I’d pay £150k max for it. How do I go about finding the money? 

So in total I’d want around £200k on mortgage. I have an income of £48k the calculators I last checked said I could borrow around £220k on my income but that’s for one property. 

I have a good credit report. A bit of debt at the minute as we’ve renovated a lot (£9k loan and 6k 0% credit cards) 

I do have a little bit more earning potential as I’ve recently started a cleaning business as a 2nd income. That’s generating about £400 a month at the mon but I’m only 2 months in. 

Is it worth trying to speak to a broker?

Hoenir

Two semi detached properties converted into one six bed property may well result in overall devaluation. Your mortgage lender might not be agreeable to your plans either. Full of complexities where more than one mortgage is involved. 

FtbDreaming

Don’t necessarily have to be converted into one large house… as I said it’s the garden space I want to merge on the back and the parking on the front. The houses can essentially stay as they are although I know if I were to do that then they’d have 2 lots of bills and council tax etc. 

a 2nd option I’d consider is a BTL mortgage. I’d have to release enough equity from my house to pay a 25% deposit for a BTL mortgage though. If it was a BTL I’d rent the house out and partition off a small section of rear outdoor space for the tenant but the front and back would have to be mine to use as I please as that’s why I want it. 

I know BTL isn’t as easy as it used to be etc but we have people that would happily rent it that we trust. 

Emmia

This is all based on your current neighbours selling to you for £150k. Would you pay their asking of £175k?

If your neighbours can get £175k from someone else, then this would be a pipedream.


Personally, I wouldn't fancy living in a semi, where my neighbour has 6 dogs.

housebuyer143

It doesn't sound like you earn enough to support both mortgages on a residential unfortunately. 
Lenders do not like people knocking two properties into one. Speak to a broker to check but If you tell them this is your plan to knock them through you will likely not get the money.

BTL would be much easier. You would need to a 20-25% deposit which I assume you would need to take from your current residential and then you could take some additional land from that one but again, you need to tell the lender because what you are doing will seriously devalue the property when you come to sell it, unless you plan to use it unofficially and change it back when you sell it?

movilogo

I know someone who did exactly this. They bought their neighboring property, albeit 50 years back and effectly used 2 semis as a single house. Only structural alternation they did was constructing a large conservatory at the rear spanning width of both houses, after knocking down garden fence. After enjoying the house, once the parents died, the children sold the property as 2 separate semis.

If you can sort the finance then yes it is a good plan. But don't make any structural alternation like creating a door in common wall etc. because it will make selling harder later. No buyer will like if next door neighbor can enter thru an internal door!

BTL or AirBnb can be a good option provided you have demand.

FtbDreaming

Emmia said:

This is all based on your current neighbours selling to you for £150k. Would you pay their asking of £175k?

If your neighbours can get £175k from someone else, then this would be a pipedream.


Personally, I wouldn't fancy living in a semi, where my neighbour has 6 dogs.

The neighbour said they’d take £165k. In 6 months when it’s still on the market they will probably consider less. (It’s currently empty and falling into disrepair)

Their house has the garden/ land but internally is not a patch on mine. They’re greedy and overpriced it. They had it up for sale in 2012 for 4 years and never made a sale then. I doubt they will now. 

Also I am the neighbour with 6 dogs and luckily I wasn’t thinking of you when I got them. I don’t really care who wants to live next to me! The neighbours we do have are very good and if I were to buy next door I’d still have the same rear and side neighbours we have now who we get along well with. 

FtbDreaming

housebuyer143 said:

It doesn't sound like you earn enough to support both mortgages on a residential unfortunately. 
Lenders do not like people knocking two properties into one. Speak to a broker to check but If you tell them this is your plan to knock them through you will likely not get the money.

BTL would be much easier. You would need to a 20-25% deposit which I assume you would need to take from your current residential and then you could take some additional land from that one but again, you need to tell the lender because what you are doing will seriously devalue the property when you come to sell it, unless you plan to use it unofficially and change it back when you sell it?

Thanks! I thought it would be tight but not necessarily unthinkable to have £200k mortgage on £48k salary… some areas that would be the cost of 1 average house! BTL would be an option too as I say I don’t necessarily need the house 🏡 

I’m not sure I’d want to knock through the house. I like mine as it is. I do want to knock through the gardens but that could easily have a fence put back up in the future so not really devaluing either! 

FtbDreaming

movilogo said:

I know someone who did exactly this. They bought their neighboring property, albeit 50 years back and effectly used 2 semis as a single house. Only structural alternation they did was constructing a large conservatory at the rear spanning width of both houses, after knocking down garden fence. After enjoying the house, once the parents died, the children sold the property as 2 separate semis.

If you can sort the finance then yes it is a good plan. But don't make any structural alternation like creating a door in common wall etc. because it will make selling harder later. No buyer will like if next door neighbor can enter thru an internal door!

BTL or AirBnb can be a good option provided you have demand.

Thankyou! This is exactly what I am thinking. I don’t think I want to knock through either. I was thinking air bnb or lodgers. I know renting to actual tenants is a minefield and they end up with more rights than me! 

Another option would be to sell mine and buy theirs for the land and the house but I love my house and all the work I’ve done to it I wouldn’t want to see anyone else here 😂 their house is basically the same as mine inside but outside the footprint is about 5 times bigger