Cunning plan for MFness or total non starter what do you think?

Ibex

Hi All

Can I run this past you guys?

I have a cunning plan or at least a kernel of an idea of how I can achieve Mortgage Freeness whilst staying in my current house.

A bit of back ground information. We are coming up to the end of our present mortgage reduced interest rate in mid July. My original plan was to sell then and buy something a lot smaller/cheaper to end up with a lower mortgage of about 80-120k with the hope of paying this off in about 7-10 years to coincide with my retirement.

Currently our house is worth about 330 - 350K we have a large mortgage of 183K plus I have debts see signature and my husband also has debts 34K (he’s on a DMP) so these would be paid of as well if we sold and moved.

Now our house is very large as it had a huge extension put on it in the early 80’s. I recon that the extension is big enough to be made into a completely separate one bedroom flat, there would even be enough space for a small garden and an off road parking space. Around my way one bed flats are currently going for about 150K. This would leave us with a three bedroom house a decent sized garden and a double garage, the house would then be just a little bit bigger than the original house, but just fine for us.

I’ve just done a tiny bit of research and I have found out that this would definitely require planning permission.

I guess other things to consider are
1. How would it be financed?
2. How would the mortgage provider feel about us doing this?
3. Tax on the profit
4. Who would be responsible for repairs of adjoining structures eg roofs.

Have any of you done anything like this? Is it a complete non-starter, am I mad to consider it? What would be the pitfalls?

Grateful for any comments/advice.

Thanks in advance.

Ibex

Kaz2904

I would think it should be possible but may be difficult to put into action.
Definately worth investigating though.

Ibex

Thanks Kaz for your reply, yes I will definetely do loads more research. I can see this will require a huge effort should we decide to go a-head.

aliportico

Developers do that sort of thing all the time, don't they - buying a house and splitting it into flats and so on - so it must be possible. An architect might be the person to talk to? Any initial advice-giving session should be free, I think. Sounds like a good plan though!

getmore4less

How do you fund the conversion?

What is the sum of the parts, the value of what is left will be a lot less?

The debt is costing you a fortune and if the place is just too big anyway a move may be the right/cheaper thing to do

What would a 3 bed with granny flat/annexe be worth, keeping the place as a single dwelling may be more attractive.(sell with planning unless you can get funding) and then you could rent the annexe to reduce debts/provide income

Do you have enough space to just rent out some rooms to increase income rather than totaly self contained unit.

Ibex

thankyou you so much for you replies

aliportico - great suggestion I will see if architects will do a free consultation but think before I see an architect I'll ask a builder for a very rough idea of the costs.

getmore4less - yes you are right selling is probably the best solution, I think I need to do some soul searching am I just trying to stay here out of sentiment! The house would be worth around 250k after conversion and the annex/flat about 150K so not alot of extra value, but it would enable us to extract some value from the house and reduce our debts/mortgage. Your suggestion about renting out the rooms is a good one also. As far as funding the project this has not been thought through yet but no doubt I would have to borrow the money some how gulp.

melvis

You'll need the consent of your mortgage lender before you can go ahead with anything. They'll probably do a valuation (which you'll probably have to pay a fee for) to check that the value of the remaining property will be enough security for the mortgage. You'll also need to get a solicitor somewhere down the line as the new property will need a new Title Number etc with land registry.

Old_No.7

Hi there, a friend of mine is just dividing a flat into two, and if you want to be able to sell them separately, they will need to have separate meters/supply for gas, (water?) and electricity. She found this quite hard to get arranged. Not sure if she's onto the new Title number for Land Registry, that's a good comment, thanks Melvis!

looby-loo_2

I'd be nervous of selling. Have you thought of dividing and letting, that way you still have your house and the income could be enough to pay the extra mortgage.
We have a 'granny annex' but have never let it out. It has one room, a kitchen and ensuite. It was valued by an agent at £280 per month which would go towards your mortgage.

(at the moment it houses a cat)

cazmanian_minx

Selling with planning might be the way to go. There's a semi-detached house just up the road from me that needed complete refurbishment (old lady had lived there for many years and not maintained it) - it sold last summer for £279k, the new owners did nothing to it apart from get planning permission for it for conversion to three flats and it sold again recently for around £359k.

Caz

Ibex

Thank you all so much for your replies, its given me lots to think about.

As suggested I will look into the feasibility of making some minor modifications to the house and letting out those parts out without actually having a seperate dwelling (this gets around planning regs. I understand but will investigate) however i'll have to do plenty of research into landlord legislation and stuff.

loody-loo - i'd love to have a granny annex like you - but for my dogs not a cat :rotfl: :rotfl:

Very grateful for all your feedback

BW

Ibex.