Status of Structure or Building after Splitting Title

[Pemu]

Evening everyone. 

The land/property I am looking to buy is an end of terrace plot which the owner of the last house has obtained PP to build a 2 storey house on and will be splitting the title for and then selling. Currently, there is an extension on that land the footprint of which is the same as the eventual houses. The extension was build in the 70s and there are no plans, certificates, or detailed planning documents. On the council's planning portal it just has the date of the application for an extension and that it was granted, without any further details. The extension has garage shutters on the outside but has for a long time been used by the current owner as a habitable room. 

On the new planning application is was put down as storage and bathroom. 

My question is, when the current owner applies to split the title of the property (and I have no idea how that process works), what is likely to become of that structure? Can it, for example, be registered as some sort of habitable space as it is? 

The new planning permission mentions "Subdivision of site involving demolition of garage and erection of an end of terrace 2 bed single family dwelling."

One of the main reasons for asking is that between dividing the property and beginning construction may be a year or two and we would rather try to let the building in the meantime. 

Does anyone have any experience or clue about what would happen here and is there anything we can/should do to ensure that is feasible?

 

I am attaching pictures of relevant parts of the application. 

 

 

 

[Temp]

+1

 

In addition to planning permission I suspect there will be a lot of other issues just to make it habitable and legal for renting out..

 

New water, gas and electric supplies and meters needed.

Electric circuits need separating from existing house and connecting to new meter and Consumer Unit.

Heating system ? New boiler required?

New sewer connection (existing WC uses sewer connection of existing house)

 

Possibly other things to meet building regs such as... 

Exterior doors (fire regs).

Sound proofing of wall between new and existing house.

EPC (needed for renting)

 

 

[Pemu]

8 hours ago, Temp said:

+1

 

In addition to planning permission I suspect there will be a lot of other issues just to make it habitable and legal for renting out...

 

 

Thank you for the thoughts.

So, the cost and hassle of making it habitable, only to then later demolish it could potentially outweigh the income gained from renting it out for 18-24 months. The potential income in that period would be £10-15k.

 

Other than all of the above, from a Planning Permission perspective, would would the process be? So, from the previous post, I understand the land registry aspect is a separate, isolated one and perhaps not that relevant here? After that's done, or irrespective of that, what would the process be (in terms of applications/etc.) of converting an existing structure into bedsit? For argument's sake, if we agreed to go through all of the hassle, what would this sort of conversion be called and what sort of professional and legal services and expertise will be required and what kind of time frame?

 

Edited November 9, 2019 by Pemu

[Ferdinand]

IMO the convert to resi for 18 months is a red herring for reasons you state.

 

If you want some revenue before the project I would say rent it out to someone for storage or storage + admin office, which the Council have probably acknowledged as an existing use by granting you Outline on that assumption. That will bring maybe 5-10k in Enfield for no trouble on your part.

 

I would worry more about the Outline Permission expiring, if the chap still has that stuff to do. If the PP runs down to 6-12 months left, it is arguably worth less. Have your Detailed Application ready. You probably need to speed him up.

Ferdinand

 

Edited November 9, 2019 by Ferdinand

[Ferdinand]

22 minutes ago, Sensus said:

 

Do we know that it's an Outline approval? I've just skim-read the OP again, and I can't spot any reference to that?

 

I see they are listing the NDSS as a relevant policy (unlucky, OP... not very many LPA's have adopted this - mainly those within London, but I see that it's Enfield you're dealing with)... in which case you also need to check the size of the existing extension to ensure that it is big enough to form a dwelling in its own right.

 

I was going off point 6 ... details not submitted ... plus the fact of Approval, and thinking that that left Reserved Matters for those items.

 

I guess that that it could be that there are conditions we have not seen.

 

Though I think the same points about timings probably apply if Detailed is in place.

 

F

[Pemu]

37 minutes ago, Ferdinand said:

I would worry more about the Outline Permission expiring, if the chap still has that stuff to do. If the PP runs down to 6-12 months left, it is arguably worth less. Have your Detailed Application ready. You probably need to speed him up.

 

Thank you for the ideas. 

 

When you say Outline Permission expiring, you mean the 3 years on the permission for the new dwelling expiring or coming close by the time the seller has managed to get all the utilities separated, etc?

 

A lot to think about...

 

Please do continue with your thoughts, even anything that's stating the obvious as it probably won't be for me. 

[Pemu]

 

3 minutes ago, Ferdinand said:

Though I think the same points about timings probably apply if Detailed is in place.

 

 

What do you mean by "detailed"? DO you mean submitting detailed plans to the council, including engineer's drawings, etc.?

If so, none of that has been done. It's just a basic outline for the principal planning permission. 

Sorry if I'm messing up all the jargon. 

Edited November 9, 2019 by Pemu

[Ferdinand]

For example, an Outline Application could be for Building Houses and the Design of the Roadway, with everything else reserved.

 

You might d9 that if you had doubts whether they Council would approve the roadway, so that you do not pay for archaeologists, tree surveyors, naturalists, drainage designers etc if the road not being possible would stop you anyway.

 

Then you could do all those at the Detailed stage.

 

Or getting an Approval at Outline will convince a potential buyer that the development can be done, and leave them able to design eg the precise mix of houses to meet their needs, without you having to waste money doing something they would not agree with.

 

Ferdinand

 

[Temp]

6 hours ago, Pemu said:

Thank you for the thoughts.

So, the cost and hassle of making it habitable, only to then later demolish it could potentially outweigh the income gained from renting it out for 18-24 months. The potential income in that period would be £10-15k.

 

I think it could be close. You will have other costs I forgot to include such as council tax. If it's uninhabitable you may not have to pay that. If you rent it for storage watch out for business rates (Some investors in storage containers/pods have been hit for that). You also pay income tax on the rental income.

 

Is there any possibility you might want to retain part of the existing building?...

 

1) A knock down and rebuild qualifies for 0% VAT.

 

2) Retaining part might make the rest liable for VAT at either 20% or 5%..

  a) Renting it out and retaining part for the new build would make the new build liable for 20% VAT.

  b) Leaving it empty for two years and retaining part for the new build would make the new build liable for 5% VAT (as it qualifies as an empty building).

 

 

 

[Ferdinand]

3 hours ago, Temp said:

If you rent it for storage watch out for business rates (Some investors in storage containers/pods have been hit for that). You also pay income tax on the rental income.

 

Find out what the rateable value is - may be below the small business exemption level.

 

And the liability should fall on the tenant (once you have a tenant), which may affect what you do.

Edited November 9, 2019 by Ferdinand

[Pemu]

Am I correct in understanding that standard residential duty will be payable on the purchase price of the land regardless of any of the above possibilities due to it originally being part of a residential property?

I read some details on this site:
https://www.mortgagesforbusiness.co.uk/news-insight/2015/february/stamp-duty-land-tax-on-development-land-purchases/

If anyone knows any different please let me know. 

[Temp]

I think that link makes it very clear it would be residential duty.

[Pemu]

Thank you for all the very useful advice everyone has offered. Based on my specific circumstances, I'm currently inclined towards seriously exploring the idea of getting planning permission to convert the current structure into a habitable/rentable space. The main attraction is that this will help me buy more time to start the eventual build and give me a relative safety net if something  goes wrong and I can't build at all in the next 5 years. 

As advised above, I understand that will require various things like a proper planning application, separation of services, register for council tax, etc. San anyone share thoughts or advice on the following for now:

 

1: Is there anyway I can get a survey done of the current structure to advise me if it's likely I could get planning permission for it as well as a list of work that would be required to meet BC regulations, etc. ? Is there any particular type of professional service I can employ for that and how much might that cost?

 

2: The current structure has been there for well over 10 years (well, 41 to be precise). Will that make BC, etc., any easier, or will they hold the building up to the same standard as a new build? The owner doesn't have any documentation for the work as it was probably carried out a few owners ago. 

 

 

Thanks again

[Temp]

51 minutes ago, Pemu said:

1: Is there anyway I can get a survey done of the current structure to advise me if it's likely I could get planning permission for it as well as a list of work that would be required to meet BC regulations, etc. ? Is there any particular type of professional service I can employ for that and how much might that cost?

 

2: The current structure has been there for well over 10 years (well, 41 to be precise). Will that make BC, etc., any easier, or will they hold the building up to the same standard as a new build? The owner doesn't have any documentation for the work as it was probably carried out a few owners ago. 

 

Planning Permission: You could pay the planners fee for pre-application advice, or hire a planning consultant, or both. The planners may ask for elevation drawings of what the outside would look like and possibly a site plan. Sometimes there are specific reasons why the planners aren't keen on creating additional dwellings, for example highways might have an issue if the only access is onto a dangerous bend in a road. In some areas they also have a policy against  turning  houses into flats and may see this as breaching that policy. 

 

Building Control: Any good builder, architect or plan drawer should be able to advise on the building regulations issues. This would include things like ensuring the internal layout meets fire regs, insulation etc. If you make a "Full Plans" application to building control then building control will tell you before you start work if the plans meet the building regs. If you make a cheaper "Building Notice" application they won't, and you may not find out what's needed until an inspection and a lot of the work has already been started. 

 

You also need to check there are no covenants in the title deeds that preclude building a separate dwelling on the land.

 

 

Edited November 14, 2019 by Temp

[Pemu]

I think what I am exploring is classified as a "garage conversion" and according to the article below, there are companies that specialise in this. If anyone can recommend any such companies that serve North London, please do so. 

https://www.homebuilding.co.uk/garage-conversion/

They also mention that foundation will likely need investigating to see if they need reinforcing. 

The also mention it requires "change of use". Is that like a separate application to the full planning application?