Inaccurate initial mortgage valuation report.

ACG

PorettiPlant said:

But you are allowed to let out a room on a residential mortgage. Wouldn’t this be equivalent since it is classed as one property?
anyhow, i appreciate you taking the time to gave some impartial advice.

No. Under the rent a room scheme you are renting out a bedroom in a house with shared facilities. 
With what you have done, you are in essence giving them their own room, kitchen area and bathroom and it is able to be separated from the main residence with I assume some sort of lockable door. 

Also the type of tenancy would be different, one is a lodger. The other is I assume some sort of short term holiday let contract (not sure what type of contract it would be as holiday lets are not really my thing). 

With it being its own separate area, there is a risk you could sublet it. 

I imagine if you plead ignorance, apologise, confirm you will put it back and either send photos or have a surveyor out the lender might back down. If not, you should be able to remortgage elsewhere assuming it is suitable for other lenders

ACG

Hoenir said:

PorettiPlant said:

we cannot get a residential mortgage and are being forced to sell by our current mortgage company or threatened with legal action.

You've knowingly broken the terms and conditions of your mortgage contract. That's the issue. The valuation of the property as orginally conducted is a red herring. 

Difficult to prove it was knowingly but yes the terms have been broken. 

Hoenir

ACG said:

Hoenir said:

PorettiPlant said:

we cannot get a residential mortgage and are being forced to sell by our current mortgage company or threatened with legal action.

You've knowingly broken the terms and conditions of your mortgage contract. That's the issue. The valuation of the property as orginally conducted is a red herring. 

Difficult to prove it was knowingly but yes the terms have been broken. 

When you sign any legal declaration you agree to the terms and conditions as stated. Whether people bother to read fully the documents sent is entirely up to them. Consumers have protection agaist unfair terms. Beyond that the law is on the side of the lender. As the HMRC would say, ignorance is no excuse. 

Is the Leaseholder aware? 

Is the additional space properly insured? 

ACG

I agree. But realistically nobody reads the T&Cs, in 13 years as a broker I have had one person question something in the T&Cs. 

I have maybe 2-3 a year who question something in the mortgage offer. As the T&Cs are infinitely more complex than the offer document, I think its fairly safe to say nobody reads them. 

Which would mean it probably was unknowingly. Im not saying that is an excuse, im saying it is difficult to say it was knowingly. 

silvercar

PorettiPlant said:

But you are allowed to let out a room on a residential mortgage. Wouldn’t this be equivalent since it is classed as one property?
anyhow, i appreciate you taking the time to gave some impartial advice.

I agree with this, there is a world of a difference between letting a room (even en-suite, even with some sort of kitchen) in a flat that you live in to letting out a whole flat. The former gives the occupier only the status of a lodger with no rights and shouldn't be a problem for a lender.

Hoenir

ACG said:

I agree. But realistically nobody reads the T&Cs, in 13 years as a broker I have had one person question something in the T&Cs. 

I have maybe 2-3 a year who question something in the mortgage offer. As the T&Cs are infinitely more complex than the offer document, I think its fairly safe to say nobody reads them. 

Which would mean it probably was unknowingly. Im not saying that is an excuse, im saying it is difficult to say it was knowingly. 

These days the culture is to blame someone else after the event. 

ACG

Hoenir said:

ACG said:

I agree. But realistically nobody reads the T&Cs, in 13 years as a broker I have had one person question something in the T&Cs. 

I have maybe 2-3 a year who question something in the mortgage offer. As the T&Cs are infinitely more complex than the offer document, I think its fairly safe to say nobody reads them. 

Which would mean it probably was unknowingly. Im not saying that is an excuse, im saying it is difficult to say it was knowingly. 

These days the culture is to blame someone else after the event. 

Thats why I was trying to make it clear its not the surveyor or the broker. The property has changed, thats where the problem has come from. 

PorettiPlant

Thanks all. I just didnt think we would have been given a residential mortgage on a property that had the potential for subletting prior to the change we made (the kitchenette - that is just a few cupboards, no oven etc). I think we will try to get a buy to let mortgage. To be fair the mortgage company have not threatened any immediate action.