Mortgage for house with planning issues

GetWithIt

Has anyone had any experience in actually getting a mortgage on a property with known planning issues?

Specifically I'm looking at a house with an extension. Planning was requested for the extension but refused. It was built and retention was sought and refused.

The extension is a complete dogs dinner and my intention would have been to knock it anyway.

Would a bank entertain such a scenario? I am already mortgage approved for a value far in excess of the asking. I have an estimate for the demolition and have sufficient cash to cover it and the purchase/deposit costs.

killers1

GetWithIt wrote: »

Has anyone had any experience in actually getting a mortgage on a property with known planning issues?

Specifically I'm looking at a house with an extension. Planning was requested for the extension but refused. It was built and retention was sought and refused.

The extension is a complete dogs dinner and my intention would have been to knock it anyway.

Would a bank entertain such a scenario? I am already mortgage approved for a value far in excess of the asking. I have an estimate for the demolition and have sufficient cash to cover it and the purchase/deposit costs.

With the right legal protection in place and binding contracts you could look at paying for the extension to be demolished prior to the drawdown of the mortgage. The bank would be need to satisfied that the property is still acceptable security and within their loan to value criteria. For the bank to allow you to go ahead with the purchase and subsequent demolition will require a Qualification on Title from your solicitor which they may or may not be willing to agree to. It depends on the lender to be honest. Talk to your solicitor & the bank and you should be able to find a solution that allows you to proceed.

GetWithIt

Thanks. My point of contact in the bank has given an initial view that a self build mortgage may work.

Basically I'd provide a detailed estimate for the work and the cost of knocking the extension would also be placed on the mortgage. However only the proportion relating to the purchase would be initially advanced. Only when all works are complete would the remainder become available.

So I basically pay for the demolition up front.

This was a somewhat informal conversation but it does at least seem a possibility.

killers1

GetWithIt wrote: »

Thanks. My point of contact in the bank has given an initial view that a self build mortgage may work.

Basically I'd provide a detailed estimate for the work and the cost of knocking the extension would also be placed on the mortgage. However only the proportion relating to the purchase would be initially advanced. Only when all works are complete would the remainder become available.

So I basically pay for the demolition up front.

This was a somewhat informal conversation but it does at least seem a possibility.

Your point of contact in the bank is giving you the mechanics as to how the bank may be willing to issue the loan to you i.e in stage payments etc. This is fine, however it doesn't address the fundamental issue, which is the legal one. If the property has an extension built that doesn't have planning permission your solicitor cannot give the bank 'good and marketable' title to the property because if you default on the mortgage prior to demolishing the extension then the bank would need to have it demolished before they can sell it on. You are looking for a solicitor to qualify title to the bank by asking their permission to allow you to purchase the property and demolish the extension afterwards. You will need to be able to show the bank you have the funds to carry out these works and that they will be done soon after purchasing. Just ensure you have a good solicitor and a good advisor but it's certainly a runner..