Property/financial advice - property development

[Kentlife1996]

Hi there,

New to the forum and am keen to see if anyone is able to give some advice/insight on our property conundrum.

We are in the very fortunate position to have recently purchased part of a farm. We are in our late 20’s and the mortgage is pretty large. I am employed and my partner is self employed with a good income. We can afford the mortgage fairly comfortably currently, but could get pushed out of our comfort zone should interests go up too much more.

The property consists of an old farm workers bungalow which we are currently living in but needs extension and full renovation.

On the property we also have a large barn which with planning could be converted into a large home (at a guess would be worth £900,00 - 1,250,000 competed)

The property is mortgaged as one currently.

We would love to extend and renovate the bungalow to live in with a view to maybe develop the barn in the future and rent as an income. In order to afford to do this we would need to remortgage within a couple of years to hopefully release enough funds to at least complete a large chunk of the build.

However it also seems silly to have another barn sat empty for potentially years when it could be developed and potentially provide a rental income and equity to put towards developing the bungalow?

Does anyone know how it would work in terms of getting a loan to renovate the barn, to then refinance it to cover costs of the build and potentially more to put towards renovating the bungalow?

We need to speak to a financial advisor really and will do at some point but we are just trying to get our head around the best plan and how to move forward.

We would like to get married and have children in the next 3-4 years also so we would love to have the bungalow renovated before then, but also would like to make decisions that will give us more financial stability for the future.

Any thoughts or ideas of what you would do?

I’d join a couple of large home restoration and renovation forums: Houzz, BuildHub, Period Property Forum etc. And then a couple of trade forums, such as DIYNot. You’ll get a broader idea of the likely scale of the project, and different sorts of build financing.

It’s unclear whether you’re considering a self-build or having professionals in, but either is a lot more complex (and expensive) than just getting planning permission, getting a design, fishing finance, and starting work. There’s a reason you often see derelict farm workers’ cottages, outbuildings and barns on farms!

Hmmmm, could you move into the barn and switch the mortgage on the bungalow to a buy to let? You might be able to release more equity. In order to qualify for a buy to let mortgage on the bungalow you would have to get it valued from a lettings agency. I know this doesn't solve your problem, but it might raise some money and allow you to renovate one or the other.

You're in your 20's so I'm guessing your both tough :))