Posted on 3 January 2012 by jo
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 wouldnt 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 and tell the consultant the date and title of your question, they will then be able to advise you on your situation.
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