Help needed! Financing a renovation and pesky planning issues(6 Posts)
Advice needed: financing a renovation and planning issues
Hello! I am a Mumsnet newbie and a complete dunce about mortgages and the like. So I'm hoping that you kind folks might be able to give me some opinions and advice. Please be gentle, and dont worry about dumbing down, words of one syllable are fine!
Here goes. I live with my husband and baby in a house which is valued at £180k. We have a relatively small mortgage on it (£76k) and have seen a property which we are very keen to buy. It needs a LOT of work, it's watertight and roof etc in good nick but it's not a home and would require an extension to make it one. We're happy to slum it and camp out for a while and there is accommodation on site we could live in but ideally we would like to stay in our house while the first phase of development is completed. Also there is no chance we'd be able to sell our house in time as the vendors want a quick exchange. We'd need £100k to buy the place and then about another £50k to do the first bit of work to make it habitable. We've got about £20k in savings. And when I was looking to remortgage our current home after the end of our (very expensive, fixed at entirely the wrong time) five year deal, I was told that in affordability terms, we would be able to borrow up to £172k, just to give you an idea of where we are, credit-wise.
We were advised that one option could be to remortgage our current home to 50% LTV and borrow the rest from a specialist renovation mortgage provider. However, we've hit a stumbling block in that there is detailed planning permission on the site which is for a much larger, grander development than we would like, and I was advised today that lenders will only lend the amount needed based on the plans that are in place, which is out of our budget by a fair bit.
We are trying to work out if we could scrape up the funds to buy it by remortgaging our current home and using our savings and perhaps another loan to secure it and then reapply for planning permission for our plans, which might not get granted. But that would leave us with no money to develop it until we had sold our current home, and we would only then have a property worth £110k and then the amount we could borrow by mortgaging that would not be enough to complete the development.
So we're stuck. It's really our dream home, or rather could be, and I feel like it's slipping away. Maybe it's just not possible, but I want to be sure we've explored every option before we give up. It's so frustrating as if the site had only outline planning permission, then we'd be fine. It's the detailed plans which have scuppered everything.
So my questions are: has anyone experience of changing plans once planning permission is in place? Are planners likely to grant permission again for different plans? And can anyone help untangle the mortgage/loan mess? I've played with so many figures that my head is spinning.
Thanks in advance, hope you can make some sense of it all. And if you think I am being hopelessly naive and ridiculous, please put it gently!
You might be able to change the condition that lists the plans to different plans that you want - alternatively, if there's consent for a larger development, putting in an application for a smaller one shouldn't be an issue. If its non-contentious, you could get consent in 8 wks and could submit an application now, before you've completed or even exchanged - just send the current owners the 'Notice' that you find in the planning application forms pack.
Okay I have a bit of experience. First any house is deemed 'unmortgageable' if it has no kitchen or bathroom or Japanese knotweed or structural issues etc. vendors 'in a rush' could have something to hide!?! I always ask the agents 'what's wrong with this property?'. Yes you can have several different planning permissions granted and they chose to implement whichever you wish as long as you begin the works within the 5 years from grant of planning
and you have money to burn to spend on endless architects fees. You can also get a mortgage with staged payments so that more money is released as progress is made eg ground works, roof on, etc. if its your dream home then go for it we have even considered bridging loans in the past. Just thinking you can also do 'let to buy' mortgages whereby you let out your existing home and use equity from that as funding for the other house. Good luck!
Thanks for responding. The vendors are a small charity so I think the rush is just to get rid of it before it costs them any more money. I got the impression from the agent that the sale would not only depend on the highest bid but whether the buyer was in a position to proceed or not.
We had considered let to buy, but need to find out what the local letting market is like to see if it would be possible. But it's certainly an option.
Thanks for the planning advice too, the specialist advisor I spoke to did say we could apply but made it sound very expensive and difficult so I was put off.
Oh and it has a kitchen, we are not sure about bathroom as we've yet to see inside it (but it is evident that is has been well maintained) but I guess there will be as it has been occupied recently.
You can do you own drawings remember!! My hubby did this for one extension.
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