Splitting a title, i.e. seperate off an annexe to enable buy-to-let mortgage.

[Bignose2]

Hi,

 

Inherited a large house, no mortgage, all probate etc. sorted but need a mortgage to buy-out my brothers half.

 

It has a self contained annexe, kitchen, bedroom, toilets etc. actually used for staff for the last 45+ years for my business on the adjacent plot of land.

Free to staff, no tenancy agreement. all fenced so can create a boundary, does back on to the main property garage, shared wall but assume can be a boundary.

 

Trying to get a buy-to-let mortgage which is near impossible. Initial enquiries via a specialist even they are fussy & if somehow OK unafforable rates even though only need for half of the property.

With an annexe attached main stream lenders are not interested. Had valuations, all very happy but I guess as potentially we could have stangers living there they will not approve, have said if annexe was not on the title they would not have a problem even though close & next door.

 

My wife & I will own both properties, we actually own the business next door & then my own house further over, my property is made up of 3 titles as I have bought bits of land over the time.

 

We would never sell it seperately (would devalue the main, rather nice large house), purely for lenders tick boxing.

 

Can get proof from broker that they will not lend.

I am hoping the LR would consider this a fair reason.

concerns

1) someone mentioned that they don't like it if you will own both titles

2) not sure what planning it has to be honest 50+ years ago built by my Father, I know was legit but not sure if "granny annexe" for my old Nan (never lived in it) or staff from the off, always had non-family living there.

I doubt LR technially bothered about planning but guess they have to give the title a heading & it is more than a piece of land, planning is our problem but not sure what to include in any application. "Annexe & land"?

 

3) It does have it own postal address & pays council tax specific to the "Flat", leave off any application or include?

 

More compelling that I need as a staff flat but also may complicate matters so not sure how best to apply.

 

Three lenders I have tried refused point blank as it had an annexe so still seems impossible to get the buy-to-let even if unoccupied but the broker hinted with one lender it might! be possible if we sign a declaration that the annexe will not be rented out. We cannot do that but the LR might consider a reason that it does not need to be split. Technically we are not renting out but fairly sure would be breaching their intentions if we used it even being for free & not tenancy

 

Sorry so long winded, I guess details are important.

 

[IanR]

4 hours ago, Bignose2 said:

2) not sure what planning it has to be honest 50+ years ago built by my Father, I know was legit but not sure if "granny annexe" for my old Nan (never lived in it) or staff from the off, always had non-family living there.

I doubt LR technially bothered about planning but guess they have to give the title a heading & it is more than a piece of land, planning is our problem but not sure what to include in any application. "Annexe & land"?

 

3) It does have it own postal address & pays council tax specific to the "Flat", leave off any application or include?

 

It's both a planning and land registry issue, I believe.

 

First, you need to establish that the Annex will be accepted as its own Residential C3 (stand-alone) Planning Unit, by the LPA, rather than an Outbuilding/Annex, incidental to the Use of the main residential property. If the latter, then it can't be sold off separately, and if then put on a seperate title a lender can't attach a charge against it to protect their investment. 

 

You need get the planning approval documents under which is was constructed, that will define its formal use. It's likely to be an annex/outbuilding, incidental to main residence. If it is then do you have evidence that for more than 10 years it has continually been used outside of its formal use, to what amounts to being a stand-alone residential property. Indicators would be it having its own entrance, its own utilities, inhabited by non family members and not "incidental" to the enjoyment of the main residence.

 

If you have evidence of a 10 year breech, then you can apply for a Certificate of Lawful Existing Use and Development as a stand alone Residential C3 property.

If not, then you'll need to either submit a Change of Use planning application, or, if the incidental use is controlled by a condition of its planning approval you may be able to apply for an S73 variation of condition, so that that specific condition is removed from the original planning app.

 

This is definitely a subject you would benefit from the support of a local planning consultant.

 

Once you have the LPA agreement that it is on its own stand alone planning unit, then it doesn't need to be split away from the main residence's title until it is sold off, unless you want to provide a title that a lender can attached a charge to. I do also believe the LR are resistant to splitting up titles that are to remain in the same ownership, but believe they can be persuaded to do so.