One Lease, three flats ...

THE QUESTION

I am looking at a property block of flats that records show hasn't had any sort of planning for a conversion.  However, the land registry shows that one of the flats is on a lease. There are three dwellings in the block shown on the planning map. Does that mean that the property may have been converted without consent?

If they have no planning consent then can I offer to buy out the freehold and create leases on the properties?

THE ANSWER

For decades landlords have decided, almost on a whim sometimes, that they can get more income out of a house converted into flats than a single house.  Some apply for the required planning permission to do the conversion; some don’t bother and just do it anyway because it seems like a good idea to them.

If you have checked with the local planning office and they tell you no permission has ever been granted, then it will have been an illegal conversion.

This makes it unmortgageable as no lender will lend where the possibility exists, even if it is unlikely to be enforced, that the planners could order it to be converted back to a single dwelling.

You can offer to buy the property with cash or bridging finance, but that won’t change its status, so creating leases won’t achieve anything in itself. To make it mortgageable you will need to apply to the planners for retrospective planning based on established use; and complies with Building Regulations.  It would be prudent to establish how the planners would view such an application before you purchase; otherwise you are just taking on someone else's intractable problem.

Get planning approval and then you can create leases if you want to and sell on or refinance the units as mortgageable flats.

The purchase price you pay should reflect its status as an unmortgageable property. This is normally cash buyer territory and they never expect to pay full price for anything.

You can learn more here:

• Contact Kevin Wright over on his Facebook page.
• Browse the Recycle Your Cash online training library by clicking here.
• Attend an upcoming 1-Day Property Finance Masterclass event - Book in here.