Unauthorised Loft Conversion

THE QUESTION

We got the search results back on a property; it says that there has been an unauthorised loft conversion.  It must have been done a good while ago as the property has been empty for more than three years.

The plan was to use the loft as either a third bedroom or a study, but the surveyor advised that the floor needed more support.

Can we apply for back-dated planning permission, if not, is there a solution to this?

THE ANSWER

An unauthorised conversion makes the property unmortgageable, as any lender’s valuer would discover the truth about the situation and that would be sufficient for the lender to decline to lend.  So this is a cash buyer only deal - unless you know the workaround to that ... keep reading.

There is a silver lining to this deal and the key to it is retrospective planning approval, referred to as a Certificate of Lawfulness (CoL).  To proceed, you need to understand what you need to do to get the CoL when you apply.  The views of planners, structural engineers and surveyors should give you this – do your due diligence.

1. If the deal can only be completed by those not dependent on using a mortgage to purchase, most of your potential competition melts away like snow on a sunny day
2. The seller already knows, or needs to know, they have shot themselves in the foot by altering the property in a way that limits them to selling only to cash buyers
3. Any interested cash buyer will do what cash buyers the world over do - hammer down the price they will buy the property for, using their cash as the leverage
4. Once purchased, using the knowledge gained, apply for CoL
5. When CoL is given, the property now becomes mortgageable
6. If you have bought well enough, legitimising the loft conversion should increase the value sufficiently to get most of your cash back out when you remortgage

For those without cash to buy this property, the workaround is bridging finance. Bridgers will lend on it regardless of its current condition and the bridging loan is repaid when you refinance.

These can be sweet deals and we have brokered similar unmortgageable deals previously.

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.