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Splitting a commercial-residential property

THE QUESTION

If a commercial/residential property is no longer trading and is currently unfit for trading can you purchase the property through a residential mortgage or will you still need to go down the commercial route?  Or are there specialist brokers that deal with 50/50 mortgages?

It’s a 2 bed flat above a chip shop, they’re both connected at the moment and were previously leased as a single entity.  I plan to segregate the shop from the flat, lease the flat out and run the fish shop myself.  The shop needs about 3k spent to get it up and running and the flat needs about 2k to separate it from the shop and make it liveable.

THE ANSWER

What you refer to as 50/50 mortgages, part residential, part commercial don't really exist as a mortgage type.  Commercial mortgage lenders lend on full and part commercial properties, but BTL lenders don't lend on properties that have any commercial usage, part or whole.  

Commercial lenders require the...

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A little planning goes a long way

If you’ve spotted an empty commercial building and can see the potential to convert it to residential accommodation, the first step is to understand the situation in relation to planning permission.

Every property has a ‘use definition’ and all commercial property has this predesignated use.

A covers retail and professional offices
B is for offices and commercial premises
C encompasses various types of accommodation
D covers all kinds of organisations where the public attend, but nobody lives there -
like museums, all kinds of school, health centres, churches, etc. Also entertainment,
health and leisure premises.

Each of these categories has sub-divisions too.

This means that the type of business that can open up in the premises is limited to the use it’s been granted by council. So, to change use, you would need to get permission from your local council.

Permitted development

In 2013 the government - as an anti-austerity measure - instituted some relaxation in...

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