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funding to build two houses on one plot


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I am looking at developing the plot that my house existing is currently on, into two plots with two houses (A/B). One of these would be for us and the other would be sold (i have rough site plans if it helps).


We currently have about 50% equity in the existing plot / house.


I am having issues in working out how to phase the development in relation to funding, and wonder if anyone had any thoughts?


House B can be arranged and built so that were can live in the existing house whilst it is being built, but the existing house will need to be demolished to make way to build house A.


It is our end goal to live in house A.


Our initial thoughts are to build house B and live in the existing house until ready. When house B is complete move in there (for 12 months) and demolish the existing house and build house A. When house A is ready sell house B and move into house A.


The issue arises is how to fund the process, are we able to go the self-build mortgage route or would we need some sort of development loan type hybrid?


Also what are the potential tax implications of doing this way?

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Surely the simplest is divide the plot. Sell one plot (your old main residence so no CGT?) Build new house to live in and reclaim the VAT.


I think as soon as you start along the road of build 2 houses you become a "developer" and different rules apply.


So the issue becomes either how to fund building the new house before you sell the old one? or sell the old one first then where to live while building the new one?

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We were looking at doing the same but we are going to build the new house for ourselves and sell the old house we spoke to an accountant they said we would have to pay tax.

The mortgage company would not lend us the money classed us as

commercial.  Two houses on one planning application, so we split the application


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