Lay My Hat

Hello

At my house we have a (very!) small barn. It's separate to the house, but attached to the back of our garage. We bought it all nearly two years ago, with the intention of converting it to a self-catering holiday let. We've finally now got planning permission and a builder to do the work.

Once it's up and running, will I need to change my mortgage as part of the property will be used for commercial purposes?

I remember that when I took out our current mortgage I mentioned the barn and they said we might not be able to have a normal residential mortgage if we were renting part of the property out. We're just about to come to the end of a 2 year fixed deal, so we could switch, but I don't want to end up paying loads more.

Someone has suggested that we separate out the barn so that it has its own title deeds, which would keep our home entirely residential, but I don't know if that's a complicated/expensive process or even necessary?

If anyone knows anything about this I'd be very grateful!

It's very unlikely that your standard residential mortgage will accept a holiday let. There are mortgages that cover a mix of residential and holiday lets - I'm sure someone will be along soon with some names. There aren't many of them around so be prepared for the fact that you probably won't get as good as a deal as you've had before.

With interest rates so low it may not be worth the expense of separating the barn's deeds, but worth getting a local solicitor to quote I would have thought.

Hi, I would think carefully about separating it out. Would you ever want to sell it on its own? Not sure what the council tax /business rates implications would be either.

I would say that separating your property into two titles would only be worthwhile if you had future plans to sell off just part of it, say the converted barn. Being at the moment one single unit by virtue of the garage, there would be some additional legal work such as the party wall and also sorting out separate access (or perhaps joint access). All this adds up with regard to the solicitor's fees.

If you make a Bing or Google search, there are mortgage brokers and lenders shown who seem to specialize in holiday lets.

Whether or not you separate your property title, the Council may define it as a separate dwelling for council tax purposes. If it has its own entrance and is lived in or rented out as a self contained unit, this may be the case.

If you have not done so, suggest you check with your local Council. Of course if you then qualify for business rates you may also qualify for the small business rebate.