Is there an alternative to selling?
I bought a freehold property partially converted to flats, which doesn’t meet building regs, but action as a result is unenforceable due to the elapsed time since works were undertaken.
I have let the flats individually and am in the process of splitting services and upgrading the conversion.
I believe that this will allow me to regularise the conversion, create individual leasehold flats and have created value, as 2 flats in the area would sell for more than I paid for the property.
My question is: Is there an alternative to selling the properties to realise the value?
Many thanks
Richard
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Member Since February 2011 - Comments: 3453 - Articles: 286
11:09 AM, 23rd October 2017, About 8 years ago
Hi Richard,
If you look to release equity by mortgaging the property or individual leaseholds you will need to prove they conform to building regs or it will fall out at some stage before completion.
Member Since October 2016 - Comments: 81
1:01 PM, 23rd October 2017, About 8 years ago
AM I likely to have to pay two sets of fees for any new mortgage, when the flats are officially divided?
Member Since February 2011 - Comments: 3453 - Articles: 286
2:23 PM, 23rd October 2017, About 8 years ago
Hi Richard,
Yes each separate leasehold will be individual security and hence mortgages.
Member Since October 2013 - Comments: 19
11:34 PM, 23rd October 2017, About 8 years ago
Reply to the comment left by Richard U at 23/10/2017 – 13:01
You will need to speak to the lender. I am the freehold owner and lease owner of 2 flats (converted house with just the 2 flats). I have just one mortgage covering the both properties. This will only be a pain if/when I come to sell, but was a means to buying both at the same time relatively hassle free!
Member Since October 2016 - Comments: 81
11:00 AM, 24th October 2017, About 8 years ago
Reply to the comment left by zoe at 23/10/2017 – 23:34
Zoe – I was of the impression you couldn’t hold the freehold and leaseholds? And, the freehold would need to be held in a company?
Member Since August 2015 - Comments: 49
1:33 PM, 28th October 2017, About 8 years ago
Problematic obtaining retrospective BC approval for the conversion. In theory the Council should apply the regualtions in force at the time of conversion, so if before 1991 no acoustic separation measures necessary for example. Problem I have found trying to do this for a client in Finchley was the council BCO insisted on the flats achieving near current standards despite clear evidence of conversion prior to 1991, so thermal linings to external walls, independant ceilings etc. A lengthy appeal was not an option for the client. I’m not saying these improvements are not worthwhile but you need to speak to the council BCO or an independant BC body to confirm what they require at the outset otherwise it will become a very costly exercise.
Member Since November 2015 - Comments: 584
11:35 AM, 29th October 2017, About 8 years ago
We recently had to remortgage a business loan to individual BTL mortgages, so have been through this whole horrid process, but without the added complexity of the building regs issues you have. The good news is that since then there are now non-high street lenders such as Paragon Mortgages who will lend on the plot as a whole and won’t require you to split the titles and create leases.