Converting Victorian Terrace into flats

Answered on 3 January 2018 by Nick Morrey

My partner and I are considering purchasing a run down victorian terrace. We have run the sums on refurbishing it as a whole house and refurbishing it to renovate the lower ground floor to a 1 bedroom property, converting the upper 2 floors to 3 bedroom maisonette which we would live in.  We wouldn't run the lower floor conversion until a later point, therefore it is not part of our immediate plans. If we do run the lower floor conversion (a year or so after purchase we would imagine) we would potentially let it out first before considering selling. How would a lender view this? thks

I do not think any lenders will like your proposition as it stands. By leaving the lower floor renovation until later your proposal could leave a lender in possession of a property that is only half completed and difficult to sell in the current market.

In order to gain any finance for this, a lender will want to see that you have planning permission for the conversion and then it should be possible to obtain short term finance to fund the conversion. This type of finance tends to be very expensive and you need to be sure that you have a means of repaying it, either by selling or by remortgaging to a high street lender, before you start. A high street lender will want the property title split if you are going to be living in either of the flats, which would mean agreeing both a residential and a buy-to-let mortgage, whereas if both flats are to be let then there are still a few lenders who would grant a single buy-to-let mortgage on the freehold.

I believe we can help you and that you would benefit from speaking to one of our independent mortgage advisers. Please call 0344 346 3672 to speak with one of our consultants and they will then be able to advise you on your situation.

Answers provided in response to Ask the experts are based on the information provided and do not constitute advice under the Financial Services & Markets Act. They reflect the personal views of the authors and do not necessarily represent the views, positions, strategies or opinions of John Charcol. All comments are made in good faith, and John Charcol will not accept liability for them.

We recommend you seek professional advice with regard to any of these topics where appropriate.


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