Ex Pat Property with a Granny Flat

Posted on 18 August 2012 by Sally


Thanks for your help with the ex-pat question. If our mortgage company decline our consent to let are there any other options? i.e., we have a granny flat attached to our property (it has a door that connects it to the main house) if we use that when we are back in the UK working and visiting but the main house was being rented out, would we still need to swap to a buy to let even though we are still using part of the house? Thanks very much.

Sally

I think any lender looking at a remortgage application will want the mortgage to be on a Buy to Let basis as you will not be based permanently in the country and the main house will be let.  Depending on the amount of equity you have in the property there are a couple of lenders who may grant you a residential mortgage, but only if you are able to confirm your intention to return to the property on a permanent basis within a couple of years.

With either of these options though, I can see the granny flat being a potential pitfall.  The buy to let lenders will not allow you to move in when you are back in the UK and the residential lenders will be concerned that you may let it out to separate tenants.  The way around this would be to create separate titles for each property and brick up the access between the two creating two individual properties, one which you can let and the other with no restrictions as to when you can come and go.  This is a very extreme measure and may ultimately not be practical, for starters you would need consent from your current lender to split the title and they would need to be happy that the value of the house still supported their loan.

Talking of practicalities, are the utilities for the granny flat separate from the main house?  I can't imagine a tenant being happy if you come back and run up electricity and gas bills whilst they are responsible for paying them.

I hope that your current lender does give you consent to let, but if they don't please call and speak to one of our independent mortgage advisers, they can then approach the buy to let lenders to see who would be happy to ignore the granny flat.

Peter

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