How JustAnswer Works:

  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.

Ask Joshua Your Own Question

Joshua
Joshua, Lawyer
Category: Law
Satisfied Customers: 25358
Experience:  LL.B (Hons), Higher Prof. Dip. Law & Practice
35043042
Type Your Law Question Here...
Joshua is online now

Please could you advise me. There is a granny flat in my property.

Customer Question

Please could you advise me. There is a granny flat in my property. Could I use one room to start an aromatherapy business without changing mortgage or getting planning permission
Submitted: 2 years ago.
Category: Law
Expert:  Joshua replied 2 years ago.

Joshua :

Hello and thank you for your question. I will be very pleased to assist you. I'm a practicing lawyer in England with over 10 years experience.

Joshua :

May I clarify with you whether the granny flat has a self contained bathroom and kitchen please?

Customer: It has a bathroom and kitchen downstairs but the area goes on from the main entrance so I don't think it is completely self contained
Joshua :

Thanks. Could you kindly clarify what you mean by the area goes on from the main entrance please? Is this a self-contained flat behind a separate door or is it simply rooms within your property?

Customer: It is a wooden lounge door but as I have used it to rent previously years again and then to help someone out for 6 months I put a single lock there. So as you come into the main entrance there is a glass door then this wooden door goes to the downstairs area with loung, kitchen and two bedrooms and another wooden door carries on straight up the stairs to another area with bathroom, lounge and bedroom. It is all one residential property. I bought it as it is and an
Customer: Am trying to work out what to do- whether to remortgage on buy to let or commercial with planning permission etc or simply as I am thinking now just using a room to supplement my teaching profession income so that I can renovate
Joshua :

thank you. The reasons for my above questions is for a separate issue to the one you initially ask about. if you have a separate area which is self-contained within your property which contains both the kitchen and bathroom facilities, the local authority has powers to deem this to be a separate residence for the purposes of Council tax and assess a separate Council tax charge on that area of your property. This can leave you paying both Council tax for your main property but also an additional bill, usually a or B rating, in relation to the separate granny annexe. For this reason, if possible, it is wise to avoid the attention of the local authority. if the local authority were to ever find out and try to assess a separate Council tax bill, the position can be rectified usually by removing the kitchen. However in relation to your main question...

Joshua :

notwithstanding the above comments, providing the business use you propose for the property is incidental to your main use of the property as a residential property which you living

Joshua :

Sorry I hit return by mistake... I will repost...

Joshua :

notwithstanding the above comments, providing the business use you propose for the property is incidental to your main use of the property as a residential property which you live in, planning permission for change of use is not required. Planning permission for change of use to business use is required when use of your property is no longer incidental to your main use as residential constitutes your main use of the property with residential becoming a secondary use. This is usually determined upon the percentage space that is being used for business purposes whereby if this is more than 50%, the property would be deemed to be being used the business and a change of use application required. If the area you're using for business purposes is less than 50% of the overall area of the property, the use would typically be deemed to be "ancillary use" and therefore no change of use application is required.


Joshua :

in respect of your mortgage, you will have a residential mortgage and accordingly, you may not use the property under the terms of a residential mortgage contrary to planning use for the property. On the basis that your business use of the property is ancillary only as we have discussed above, there is not usually any difficulty with your mortgage. it is possible for lenders to include an express condition in your mortgage that no business use whatsoever is allowed at your property however such a condition would be unusual as the only issues in terms of use of a property lender is concerned with would typically be your compliance with planning permission as above and not renting out the whole property to tenants for which a buy to let mortgage would be required.

Joshua :

is there anything above I can clarify for you?

Joshua :

Does the above answer all your questions or is there anything I can clarify or help you with any further?

Customer: Thank you. I am sorry I have been trying to take it all in. I did recently rent out for 6 months and the council did pay benefits so they were not at that point concerned about the situation but I think I will need to get my head round things either to do buy to let downstairs while living upstairs or convert into one more by as you mention taking out the kitchen. I do need to renovate very much though for structure too and have looked at developmental finance which would give two separate mortgages. Upstairs would be residential and downstairs would be buy to let. Deeds would be split. I don't really understand it. You would pay around £2000 a month while building renovations went ahead. Does that mean you would have the money from one of the mortgages to use while doing this at set periods?
Customer: I would then be able to keep and use downstairs as renting or holiday letting or aromatherapy while having the funds to do so?
Joshua :

if you were to proceed as you propose and split the property formerly into two separate dwellings then this would once you have completed the process require your existing mortgage to be restricted to the dwelling you lifting and if you needed further finance, a separate mortgage being taken out on the buy to let part of the property. If you need finance chairing the process of the conversion, you can look at a remortgage with a development finance product such as those available from the broker Buildstore or similar. as you say, this type of finance releases payments in stages so as to minimise the amount of capital you were borrowing or at once.

Joshua :

once the conversion had been completed, the development finance loan can typically be converted into a standard residential mortgage and if needed, and additional buy to let mortgage for the downstairs buy to let part pf the property.

Joshua :

is there anything else I can help you with?

Customer: Does that mean if I used Buildstore as I have contacted briefly and they have said they can remortgage for me in this way they w
Customer: Will then use the finance from the bottom area to finance the whole project for top and bottom. I can't grasp how this works I am sorry
Joshua :

the development finance loan is made available to you with security against the property allowing you to draw down the loan in stages as the word completes. The idea being that you any pay interest on each tranche that you draw down so that you do not pay interest on the whole amount from day one. you can then use this money to pay for the works you wish to complete the property. Once the works are complete, you will from what you say then have two separate properties which you can independently mortgage using a residential mortgage and a buy to let mortgage. You can use the money from your new residential mortgage and buy to let mortgage to pay off the development finance

Joshua :

does this make sense?

Customer: Yes thank you. What do you mean by each tranche that you draw down? Would I have to sell then to pay off the development finance?
Joshua :

development finance is a very specialist product designed to be used for paying for development work. Say you were offered a loan of £300K as development finance. one option is this could simply be paid to you in one lump sum at the start however this would mean you would pay interest on the entire amount from the beginning. because you would be spending the money gradually paying for contractors work and so on, development finance normally offers you the ability to draw down the money from the mortgage gradually, for example in £100K chunks. the advantage of doing this is that you any draw down the money as you need it during development works and this saves you paying interest on the entire lump sum and therefore overall saves you money.

Joshua :

once you have completed the work, you can either sell the property to another person whereby you would hopefully make a profit or you could choose to continue to live there. if you chose to live there, you would almost certainly wish to remortgage the property with a standard residential mortgage because the interest rate payable on development finances typically higher than interest payable on standard residential mortgages. providing you have done a good job with the work you have carried out, ideally, the property would be worth more than when you started and there should therefore be sufficient equity available in the property to enable you to remortgage and pay off the existing development finance loan.

Customer: They have offered me 205,000 and I would pay around 1,000 interest either a month or maybe they meant each time there is stage so the quicker I can get the build done the better financially. So when it is finished that amount would be added to the remortgage?
Joshua :

I suspect the £1K/month would be the monthly repayment on the mortgage. It would likely be a capital and interest repayment on the mortgage - developement finance other than the above special features are essentially just the same as any other mortgage whereby they require a monthly repayment

Joshua :

Does the above answer all your questions or is there anything I can clarify or help you with any further?

Customer: This amount I think would reduce once the project is complete?
Joshua :

Yes once it is completed, you will typically be offered either the choice of converting the development into a standard residential mortgage with a lower interest rate or being able to remortgage entirely with a new lender. The broker will be able to confirm the options available to you once the work is complete but they would usually be as above.

Customer: Thank you very much Joshua. What are the benefits of regulated development finance rather than usual remortgaging or loans. I don't think I can afford a commercial remortgage
Joshua :

development finance normally offers reasonably good rates of interest when compared to standard commercial loans and therefore will typically be cheaper, sometimes considerably cheaper than otherwise obtaining commercial finance from a bank. Therefore they offer normally a reasonably cost-effective way of financing major development works and refurbishments on your property which may otherwise be prohibitively expensive through commercial finance avenues. standard residential mortgages will not allow major renovation or redevelopment works typically if the work you propose is substantial. However if it is not substantial, then a residential mortgage may allow you to carry out the work and where this is the case a residential mortgage will normally offer cheaper interest than a development loan.

Joshua :

I am glad the above has been of assistance. Are you happy with the information I have provided to you above or is there anything above I can clarify for you any further?

Customer: Thank you. Yes you have helped a lot Joshua. There is a lot to decide. Just one more question. You mentioned commercial loans not having as good rates does this include commercial remortgages
Joshua :

Yes. Residential mortgages will typically offer the lowest interest rates. development loans will typically be 1-3% higher than residential mortgages with commercial loans being usually several points or more higher than development loans. Therefore commercial mortgage will typically be quite considerably more expensive than development loans and far more so than residential mortgages.

Joshua :

A pleasure. I am glad the above was of use. If there is nothing further I can assist you with this situation develops, please do not hesitate to revert to me.

Joshua :

If you have no further questions for now I should be very grateful if you would kindly take a moment to rate my service to you today. Your feedback is important to me. If there is anything else I can help with please reply back to me though

Customer: If I have asked too many questions or you didn't get my last response could you let me know?
Joshua :

Sorry I didn't receive your last response. Could you kindly repost?

Joshua :

I will be logging off shortly. Is there anything else I can help you with before I go>

Customer: I didn't see you reply sorry Joshua. Thank you ever so much for you help. I will rate your service very highly
Customer: Dawn.
Joshua :

Sorry if you are having any difficulties. Do let me kniw if I can help with anything further.

Joshua :

Many thanks

Joshua, Lawyer
Category: Law
Satisfied Customers: 25358
Experience: LL.B (Hons), Higher Prof. Dip. Law & Practice
Joshua and 2 other Law Specialists are ready to help you
Expert:  Joshua replied 2 years ago.
Many thanks. Sorry if you had any difficulties with chat at the end. If there is any further I can help you with please let me know. I will be available again tomorrow if there is .

best wishes

What Customers are Saying:

 
 
 
  • Thank you so much for your help. Your answers were really useful and came back so quickly. Great! Maggie
< Previous | Next >
  • Thank you so much for your help. Your answers were really useful and came back so quickly. Great! Maggie
  • A quick response, a succinct and helpful answer in simple English. I believe I can now confront the counter party with confidence -- worth the 30 bucks! Rick
  • Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help. Mary C.
  • This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!! Alex
  • Thank you for all your help. It is nice to know that this service is here for people like myself, who need answers fast and are not sure who to consult. GP
  • I couldn't be more satisfied! This is the site I will always come to when I need a second opinion. Justin
  • Just let me say that this encounter has been entirely professional and most helpful. I liked that I could ask additional questions and get answered in a very short turn around. Esther
 
 
 

Meet The Experts:

 
 
 
  • Jo C.

    Jo C.

    Barrister

    Satisfied Customers:

    30316
    Over 5 years in practice
< Previous | Next >
  • http://ww2.justanswer.com/uploads/EM/emus/2015-7-7_192327_bigstockportraitofconfidentfemale.64x64.jpg Jo C.'s Avatar

    Jo C.

    Barrister

    Satisfied Customers:

    30316
    Over 5 years in practice
  • http://ww2.justanswer.com/uploads/BE/benjones/2015-12-1_0437_ennew.64x64.jpg Ben Jones's Avatar

    Ben Jones

    UK Lawyer

    Satisfied Customers:

    11553
    Qualified Solicitor - Please start your question with 'For Ben Jones'
  • http://ww2.justanswer.com/uploads/BU/Buachaill/2012-5-25_211156_barrister5.64x64.jpg Buachaill's Avatar

    Buachaill

    Barrister

    Satisfied Customers:

    1754
    Barrister 17 years experience
  • http://ww2.justanswer.com/uploads/JO/jojobi/2013-3-19_0265_maxlowryphoto.64x64.jpg Max Lowry's Avatar

    Max Lowry

    Advocate

    Satisfied Customers:

    894
    LLB, 10 years post qualification experience
  • http://ww2.justanswer.com/uploads/UK/UKLawyer/2012-4-12_9849_F2.64x64.jpg UK_Lawyer's Avatar

    UK_Lawyer

    Solicitor

    Satisfied Customers:

    750
    I am a qualified solicitor and an expert in UK law.
  • http://ww2.justanswer.com/uploads/KA/Kasare/kasare.64x64.jpg Kasare's Avatar

    Kasare

    Solicitor

    Satisfied Customers:

    402
    Solicitor, 10 yrs plus experience in civil litigation, employment and family law
  • http://ww2.justanswer.com/uploads/OS/osh/2015-7-7_19268_gettyimagesb.64x64.jpg Joshua's Avatar

    Joshua

    Lawyer

    Satisfied Customers:

    8199
    LL.B (Hons), Higher Prof. Dip. Law & Practice