Mortgage for commercial to residential

jblack_2

hello

I’m looking to buy a property which is currently half residential and half commercial use (offices).

I have a deposit of 60%. The intention is to convert the whole property back to residential and live in it.

I understand I’ll need a specialist mortgage until it’s converted then I’ll be able to change to a ‘normal’ one.

Has anyone had experience of this? Was it easy?

thanks.

eddddy

It sounds like what you want to do would be classed as "development".

So you might want "development finance". That's likely to be expensive, and the lender would normally expect you to have a track record in property conversions.

They would be nervous about lending to a novice, who might do something daft - for example, remove a section of load bearing wall, resulting in a partial collapse, and then have insufficient money to rebuild. So the lender has to repossess a partially collapsed property to sell. And the selling price doesn't cover the loan.

But I guess you could talk to bridging loan companies, to see if they would lend. But again, it's likely to be expensive.

gwynlas

A lot depends on the current sructure of the property is it obviously commercial ie shop/office ground floor with flat above or multiple ooms ground floor with residential in remainder?

You will need change of use consent from LA but nless there is substantial alterations needed there should be few problems obtaiing mortgage with such high deposit.

jblack_2

Thank you.

It’s an old house that was repurposed for use as offices. Only half of the ground floor (2 rooms) is commercial. It wouldn’t need any structural work to convert back to full residential.

Albermarle

Probably best to talk to a mortgage broker.

poseidon1

Might also be useful to talk to a mainstream high street lender such as Nat West who do both Commercial and residential mortgages who may be able to explain how to transition from one to the other - see below

https://www.natwest.com/business/loans-and-finance/commercial-mortgages-explained.html

That said this particular project does sound more like an (expensive) bridging loan scenario.

user1977

https://forums.moneysavingexpert.com/discussion/comment/82006951#Comment_82006951

Are any physical works are needing done to make it tick the boxes as a habitable house? If not then you could just enter into a contract conditional on planning for change of use and not have to deal with interim finance arrangements.