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Merry Christmas to everyone. I have recently had a 10 bed HMO planning request in Leigh turned down by the council and even more frustratingly they have also said they will contest permitted development rights for a 5 bed HMO in top 2 floors.
My only option now is to split into 5 flats, mix of 1 bed, 2 bed and studios. Wanted some advice on whether I should split the titles and how I would be able to remortgage?
thanks for any help
Housing crisis, what housing crisis!!!!!! With total (*Moderator note: word removed*) like this Council, is it any wonder people are sleeping in shop doorways.
If you don't split titles it will be a freehold flat which is not favoured by lenders. You should split title so that lenders have a title they can exercise. To save you unnecessary costs I would just do this for completion (although the valuer may wish to see a signed copy before he issues his report).
If you don't do this then you will need to secure a commercial loan. More difficult (but by no means impossible) - likely to be on a repayment basis and rates likely to be higher.
There will not be any SDLT nor CGT issue as there is no change in beneficial interest.
Chartered Accountant, Tax Advisor and Mortgage broker
(and BTL portfolio owner)
Thank you Stuart, appreciate the advice.
You might also want to consider that the aggregate Council Tax will be considerable after the conversion to multiple units - and those come from your pocket for any voids - from day one.
That’s a really good point. Thank you
Hi, have you actually considered challenging the decision? Was it justified by planning policy or a political/personal whim of the planner or planning committee? I work in development and it's depressingly obvious how often decisions are based on opinion not policy. If your goal was to achieve the split then don't give up on it until you have sought the advice of a local planning expert. A challenge will take time and some money but you look to be stepping away from a lot of potential? Good luck, whatever you decide
Thanks mark, I have been using a planning expert. The case officer was about to approve the request and at the death the ward officer who Is also the Mayor put in an objection as they believe the HMO would lead to anti social behaviour.
i am put off by the lengthy timeline of an appeal and the set mind of the council who seem absolutely determined to stop any more HMOs.
Hi, sounds like the refusal was driven by opinion rather than policy then. You might well have grounds for an appeal but it is a lengthy process, too lengthy. There's nothing to stop you appealing that decision while you press ahead with alternate applications though, in fact having an appeal running would add pressure to the council to approve your alternative application.
Before you convert into self contained flats please check with your local authority whether there are Addtionsl or Selective Licencing rules in place under s257 HMOS which potentially capture fully self contained flats.
Its a minefield if they are and any conversion has to be done according to the rules and potentially your building could be licensible.
If there are not currently, please bear in mind that your LA may introduce additional licensing in the future.
My understanding is that additional licensing is designed to cover self contained converted units which do not comply with 1991 building regs.
as the proposed conversion would be covered by planning and building regs, additional licensing would not be a problem , however my local council gave additional licensing little more than cursory consideration, deciding to go for selective licensing catching all rented property and with it far greater income.