self build mortgages?

Indigo_3

I've seen a lovely derelict warehouse property in a seaside town which I'd really like to buy and convert into a house with my boyfriend. We are both first time buyers and self-employed. Could anyone advise me who might provide the best deal on a self-build mortgage (particularly one making stage payments in advance rather than arrears)? We are expecting to pay around £150,000 for the property and the same again to convert it. We can put together a deposit of £20,000 and have a joint annual income of £65,000.

Fairdo_2

Buildloan are specialist in this area, where they have a panel of lenders that will work in different ways for different needs.

http://www.buildstore.co.uk/buildloan/

Are you sure that this property will have the correct planning consents for residential use?

Indigo_3

Thanks Fairdo. I came across the builstore site and thought it looked like a possible option but will feel a little more confident about it now and take another look. The property doesn't have planning permission as yet but I am making informal enquiries with the planning department and am getting some positive feedback so far. I have a feeling that the biggest hurdle will be whether the owner will sell it to us at a good price so that we can afford to do it up....without the planning permission in place I assume it will be valued at a lower price?

Ian_W

Indigo Wrote:... without the planning permission in place I assume it will be valued at a lower price?

No expert, but I think common sense would dictate that with PP to convert to residential use the property would be [far?] more valuable than being sold as a "lovely derelict warehouse". That does beg the question, why the current owner hasn't sought PP to increase the value of the property?

It may be the costs involved wouldn't be viable against the increase in value or they simply haven't thought of it. But it would raise concerns with me as to whether PP would be granted and /or whether any restrictions in PP would make the build costs more expensive than normal. Assume you've also checked if it's listed which would add, not only "charm & character", but to costs and time.

Not trying to be a "wet blanket" but if you've thought of it, chances are someone else will have. Best of luck & hope I'm wrong!!

Indigo_3

Thanks for your thoughts Ian. I think you're right to be cautious on all counts, and having never done a project like this it's good to hear other people's angles on it. I have done a bit of research into the property. It's in a conservation area but is not listed. The current owner tried to get planning permission in 1993 but was turned down because her plans were thought to be 'detrimental to the original character of the building'. I hope to get agreement in principle from the planning office for our ideas for the building before we spend any money on surveyors and wondered whether you had thoughts on purchasing before the permission is actually in place. That way the owner needn't know that we've got some sort of agreement to convert (albeit an informal agreement) and might sell for a better price, believing that it will be too difficult to get pp. The owner is quite an old lady now and my guess is that she's given up her conversion plans but would like to make some money on the property.

Ian_W

Indigo, I did say "No expert" - believe me on that!
It is a risk, possibly more so with the owner having had PP turned down previously and being in a conservation area. Against that you would assume the LA would be keen for the building to be restored providing it's "in keeping" etc.
Why not post on the property thread where people who have done the same or have experience in the field may read and offer advice?

Fairdo_2

Likewise, not wanting to be a wet blanket on this, but most Lenders (if not all) would want outline planning permission on this before agreeing to lend.

It may be a good time to consult with a Planning & Property Development Consultant.

It has that intriguing quality doesn't it and I can see why you are sorely tempted.

nadnad

Hi there, I'm about to start the process of building my house - am due to complete on the purchase of the site next week. We got our mortgage through Buildstore - now they do not actually give mortgages but advise you and help you through the application process - they have a panel of lenders - our mortgages is with Amber Home Loans.

They do require outline planning permission first - they wont release the initial stage of cash (to buy the site) without it. Buildstore also act sort of as a guarantor so that you can borrow up to 95% of the total cost to buy the land and build the house/ in your case renovate. They also release the funds in advance - however they do charge a fee for this - anything from 300 - £1200 I was told - our fee is £850 (dependant on the extra amount you need upfront compared with a "normal" self build mortgage). To do this be aware there is a lot of paperwork - you need outline planning, and a scale drawing of the final project - so we had to get an architect in straight away (before we actually completed on the sale). They told us we didn't need an architect's drawings but they did need plans "showing elevation and drawn to scale" - an architect in other words!! We're about to complete and they still require paperwork off us - site insurance (even though build isn't due to start until next year) and bank statements to prove that we have the money for deposit - which both myself and my solicitor thought a litle strange but no matter. Other than that its a great way to get the house of your dreams (I hope)!!

If you've any other questions just ask and I'll try to help.

boogiemaster

Look don’t be sneaky about what you intend doing? She cannot sell the property for more than the market value?
You will get permission from the council if you kiss their !!!!!! and agree to certain limitations.
A mill near me was granted planning permission as long as the outside was not touched in anyway.
The inside could be renovated to the owners taste; you want to buy the free hold and not a lease?
She might sell the building with conditions restricting you from making any profit if you do decide to sell it as a dwelling?
So be upfront and don’t tell any lies, because if you’re being sneaky she will be just as sneaky as you and in the end you could regret it.

I know a person that said they wanted the building for storage? But they applied and got permission for two dwellings; they tried to sell the building but in the sale it stated that any profits made from the building have to go back to the original owner?