Mortgage issues when you set up AirBnB on your land/anex?

[MarkL73]

We are planning to sell up and move to the wilds

We need to port a mortgage of around £250k and the rest will be equity and cash to get us a place around £850k.

One issue that has cropped up is a friend of a friend mention we won't be able to put the mortgage to a property that is obviously going to be used for an Airbnb – a quick bit of googling suggest this might be the case.

So - is it a simple case of buying somewhere with (as we plan to) 6+ acres and just buying 90% as normal but buying 1 acre separately for cash - and that's where we do the shepard hut/pod stuff?

And if that is a possible - could you go so far as this....a few option we have looked at have a main house and a separate house (often the barn or stable conversion, that is separate from the main house) - they are always being sold as one sale, but I expect I might encounter mortgage problems again with buying, what is very obvious, a second house that will be let out in some way...... So again, could I not just purchase the main house and 90% of the land and then purchase the secondary property, with a tiny garden (and a padock for huts) and a right of access for 200 K cash for example? So the mortgage company only deals with the main house that is never let, nor any of its land.

M

[Sarnie]

The two properties would need to be on separate titles before applying for a mortgage....

[MarkL73]

Sarnie said:

The two properties would need to be on separate titles before applying for a mortgage....

hmmm - logistically tricky!

[ozzuk]

You might also hit issues with SDLT (two lots) and council tax on the second home...

[Sarnie]

MarkL73 said:

hmmm - logistically tricky!

Yep, thats the problem with buying non standard properties with standard mortgages........a couple of lenders may consider the title being split on completion with confirmation from your solicitor but you would need to provide detail plans of the two plots so that they can value what they are lending against, which would be the main house and garden only, the other property and land would need to be a separate transaction and would need a BTL or a Commercial mortgage, depending on the intended usage.....

[IJWS15]

Ask yourself “What would Angela Raynor do?”

[Killer2005]

Sarnie, as always, is correct.

[MarkL73]

Sarnie said:

MarkL73 said:

hmmm - logistically tricky!

Yep, thats the problem with buying non standard properties with standard mortgages........a couple of lenders may consider the title being split on completion with confirmation from your solicitor but you would need to provide detail plans of the two plots so that they can value what they are lending against, which would be the main house and garden only, the other property and land would need to be a separate transaction and would need a BTL or a Commercial mortgage, depending on the intended usage.....

The idea would be to buy one half cash - so the lender is only lending on a regular house on a regular chunk of land.

[Killer2005]

MarkL73 said:

Sarnie said:

MarkL73 said:

hmmm - logistically tricky!

Yep, thats the problem with buying non standard properties with standard mortgages........a couple of lenders may consider the title being split on completion with confirmation from your solicitor but you would need to provide detail plans of the two plots so that they can value what they are lending against, which would be the main house and garden only, the other property and land would need to be a separate transaction and would need a BTL or a Commercial mortgage, depending on the intended usage.....

The idea would be to buy one half cash - so the lender is only lending on a regular house on a regular chunk of land.

Not possible unless you split the titles.

[Sarnie]

Killer2005 said:

MarkL73 said:

Sarnie said:

MarkL73 said:

hmmm - logistically tricky!

Yep, thats the problem with buying non standard properties with standard mortgages........a couple of lenders may consider the title being split on completion with confirmation from your solicitor but you would need to provide detail plans of the two plots so that they can value what they are lending against, which would be the main house and garden only, the other property and land would need to be a separate transaction and would need a BTL or a Commercial mortgage, depending on the intended usage.....

The idea would be to buy one half cash - so the lender is only lending on a regular house on a regular chunk of land.

Not possible unless you split the titles.

^^This

[Caddyshack]

I have done a mortgage on a split title recently with Santander. They say that it cannot be done but high level underwriters can agree it.

Santander have allowed Air B n B before.

Who is the mortgage with that you need to port?

[Dingu]

IJWS15 said:

Ask yourself “What would Angela Raynor do?”

Probably get the spelling of her name correct if making a stupid point?

[Pit Pony]

IJWS15 said:

Ask yourself “What would Angela Raynor do?”

Fake it until she makes it ? Who knows. Why is she relevant to anything ?

[thr32]

Morning all,

I tried to find a solution to this, and never did, for the reasons mentioned above. One additional concern, which (anecdotally, I admit) applies to some lenders is that there is a check whether the person applying for the mortgage also owns any adjoining titles - because that would be an indicator that it wasn’t a simple residential situation - which potentially makes it even trickier.

Sorry…

TH

[Pit Pony]

The trick is to be very rich and pay in real money and not borrowed money.

[Zigster]

Have you actually confirmed that you can’t get a mortgage on the property as it currently is? It doesn’t sound yet as if it the field is being used as AirBnB so it’s currently just a house with a big garden which isn’t that unusual.

Then, if you wished to proceed with using the field for huts to let out short-term, you could then ask your mortgage lender to convert the mortgage to a commercial one, plus other issues which I presume you would need to address such as getting council permission for the change of use.

[Sarnie]

Zigster said:

Have you actually confirmed that you can’t get a mortgage on the property as it currently is? It doesn’t sound yet as if it the field is being used as AirBnB so it’s currently just a house with a big garden which isn’t that unusual.

Then, if you wished to proceed with using the field for huts to let out short-term, you could then ask your mortgage lender to convert the mortgage to a commercial one, plus other issues which I presume you would need to address such as getting council permission for the change of use.

You can't just convert a Residential mortgage to a Commercial mortgage.

[HughT4]

A few small building societies will lend on a main dwelling with some holiday cottages in the grounds on the same title.
a couple of the big high street lenders will allow a small room or annex to be let out on a licence (NOT Tenancy) on an Air BNB style basis on traditional residential mortgage terms for certain period of time - usually capped at a max 16 weeks letting a year.
Vast majority of lenders though would want 1 mortgage per property per title and you'll want a holiday let mortgage for the holiday/airbnb lets.
Speak with a broker.

[Mr Overheads]

If it's not an AirBNB currently, jsut buy the lot. Then split the titles.