Semi commercial mortgage

If you are planning to buy a rental home, or you're thinking about what to do with one you have just acquired, this is the place for any questions about starting out in the rentals business.
Tontinette
Posts: 1
Joined: Tue Apr 12, 2022 4:45 pm
Location: Shropshire

Semi commercial mortgage

Post by Tontinette »

Hello Laymyhatters

I’ve been reading this forum for years now and noting loads of really useful tips for when we eventually got to our dream of having a property with holiday lets. We now find ourselves in a bit of a predicament so I thought the wise folks on here might have some advice…

We have bought an ex-pub in Shropshire that was converted to residential status in 2015. Our intention was to have a good sized family home and create a couple of holiday lets to provide an additional income.  We have a small mortgage with the Halifax – around 20% of the value. We went ahead and created a 2-bedroom annex with kitchen and bathroom out of the old commercial kitchens because it all came under permitted development. It’s almost ready now.

The problem arose when we contacted the Halifax to ask for permission to apply for planning to convert an outbuilding to a holiday let and they have refused the entire scheme and told us we need a commercial mortgage…which of course they don’t offer. After trying countless brokers, banks, building societies etc we don’t seem to be able to get a semi-commercial mortgage because they normally expect at least 60% of the property to be for commercial use and ours is more like 30%. Holiday let lenders will only lend on self-contained properties.

Has anyone faced this situation and found a lender willing to understand this set up? The only other solution would seem to be to split the title and create 2 x leaseholds for the letting units but then that creates all sorts of problems with flying freehold, access rights and would also require the Halifax to agree…we aren’t keen on going down that road.

One broker told us off the record that people up and down the country are letting on Airbnb without informing their lenders and that we shouldn’t have told the Halifax!

Any advice gratefully received, thank you.

 

 
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CSE
Posts: 4414
Joined: Mon Nov 06, 2006 3:34 pm
Location: Galicia

Re: Semi commercial mortgage

Post by CSE »

Welcome to the forum.
Whilst the broker maybe right I wonder how those people live? If all sounds a bit iffy.
I would contact a broker who is a specialist in commercial mortgages. There are a number to be found when you search.
Never try to out-stubborn your guests.
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