Mortgages & Finance

Hi there.

A normal buy to let lender would want to know about this and most likely not like it....their security is being altered so they would almost certainly not allow it.  Perhaps you can consider buying the land separately so have the title split as you buy it and buy the land for cash ...not easy.  If your deposit is big enough to allow you to hive off the land afterward AND keep the lender happy it is possible but you need a specialist lender you can talk to about this from outset in my experience if you do not want to find yourself in breach of the mortgage terms. If I can help more feel free to call me on 07775600621.

Robert

Broker 25 yrs, investor 19

Hi,

Buy with Bridging, split the title, remortgage the BTL property.

If you need help with this, please contact me on the number below.

All mortgage lenders application forms ask how much land is included in the title.  Then they are ask if there is any agricultural tie etc etc too.

The best way to do this is to provide as much detailed information (full address, title plans, your intentions, timeframes for works, schedule of works and breakdown of costs, end values on each title etc) to your specialist Broker who is experienced in this and who can guide you to arranging the right finance plans for your project.

Well, Kind of Lee.

If your unable to buy the property cash, you would require bridging finance to purchase the house / land.

You will then be able to split the titles, the house on one and the land on the other.

Make the necessary adjustments (like putting up a fence). Then you will be able to remortgage on to standard Buy to Let for the house. (Remember six month rule from title change may reduce options).

Then on to development finance for the Land.

Hope this helps.

Hi Mistajayljuk

If you are looking to buy a property with land that you can build on then the lender will not usually allow that property to be rented out.  This is not because they are being difficult but because the title deeds will have regulated activity (you living in the original residence) and non-regulated activity (the rented out property) and to mix the two could put them at risk with the FCA.  There are a lot of lenders out there and I have to confess I cannot say that 100% of them will not allow it but I am confident that the majority (if not all) of the ‘best’ lenders will have a problem. 

The ‘normal’ solution is to buy the property, do the build and then separate the title deeds into the residential property and the rental property (I strongly suggest getting legal advice on the deed split before the build though).  This means you can maintain your regulated residential mortgage on one and take a non-regulated buy to let on the other (once built – but you can get development finance for the build if necessary). 

If you do go down this route talk to an independent broker first so that they can discuss your plans with lenders.  One reason for this is in case there is a lender who will do it all on one title deed.  Another is that when you split the deeds less land will be coming with your residential property (as you used some to build the BTL) – so will that adversely affect the loan to value post deed separation?

Another advantage to doing a title deed split is that if you choose to sell the rental property later on down the line then you can do so much more easily as it is already split from the original deed AND you will have been able to get both the best residential mortgage options plus buy to let options as you can choose from the open market each time you need to.  If you get a lender to do it all on the same deed then you may well find yourself tied in to that lender for a long time.

I know it will cost to split the deeds but I think you will find it worthwhile and if you do choose to sell the buy to let property in the future then you would have to split the deeds anyway.

I hope this helps.

Cat