I am in the process of buying a pair of flats which are being sold together

Posted on 4 October 2007

I am in the process of buying a pair of flats which are being sold together for one price. There are an upper and lower and cover three floors, one of top of the other. They have separate entrances. I want to live in one flat and refurbish and sell the other. What is the best mortgage set up for this? Can I get one mortgage that covers both properties or do I need to get two separate mortgages and if so, does one of these need to be buy to let?

Kate

Hi Kate,

Good question, and you definitely need to speak to a broker for some personal advice i'm afraid. You also need to have good advice from a solicitor to ensure you really understand titles.  There are a few ways to do this, depending on the title and your options.  Very generically though:  yes a few lenders will lend on the freehold,  but your income would need to cover the whole thing.  As a broker I would try to negotiate this will some lenders we know well, as they may be able to take a view on the potential income from the rent. Many lenders would consider this on a semi-commercial basis.

It would be considerably easier if the flats were sold as two separate leaseholds, but the vendor may not agree to split the title before the sale as it will lose him time.  You can do it once you have bought, so if you do end up with an expensive mortgage because you buy the whole freehold on specialist terms, make sure that it has no Early Repayment Charges, so that you are free later to split the title to two freeholds, then remortgage the two properties separately onto normal rates, one of which will be a buy to let.

A broker doesn't only find the right deal, they negotiate special circumstances with lenders on mortgages you are unlikely to be able to arrange yourself.  It would be very much worth your while to call a broker and go through this one.

Katie.

Category: Valuations, Freehold, leases & unusual property

 

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