Singing Pig

First of all BTS - like everyone else on this thread I have  thank you for your incredibly detailed and knowledgeable advice.

I have a question that relates to your "informal" split of a house. I am renting out a house and intend to informally split as you suggest and rent out the two flats. My insurance is ok about this so long as there is no major structural work and the mortgage provider as you say won't care if always pay on time. I'm planning to keep the property for at least 8 years so my questions are:

I've been informed that I don't need planning approval because I'm not going to knock down any walls or make a loft conversion or split any rooms or anything like that. I'm just putting up a stud wall to create two separate entrances (i.e. where the stair bannisters are) and putting in kitchen facilities into one of the bedrooms. I am told that planing approval is not needed since there is no major structural change. In 8 years I can then go through the necessary paperwork to officially split and if that is not possible or more work needs to be done to make a proper separation then I just unsplit and sell as a normal Victorian house. Is it as simple as that or as always are there a few things that I have not taken into account?

Also if I make sure I stick to the local authority's guidlines on standards they should have no objection to me renting out both "flats" if they happened to come round and do an unannounced spot check?

And since these flats have seperate lockable entrances and no shared facilities I have no HMO licence problems right (one flat will hold 4 people the other 2 people)?

Finally can I put the kictchen in the upper flat above the living room of lower flat or do I have to put it over the kitchen of lower flat?

Thanks in advance!

Hi Ash,

Firstly thank you for your kind comments.

I'll start with the bad news - you've been mis-informed about the lack of requirement for planning permission.  Planning law no longer just relates to physical structures, it has been twisted in recent years to regulate density and a number of other issues that have become problems due to defects in other areas of the law.

If you intend doing this completely legally then you'll also need to go bald and have a 50/50 chance of going bankrupt in making the place comply with building regs, but if you've read my earlier post you'll already know that.

The informal conversion I suggested, whilst being illegal, is not exactly a heinous crime.  It's down to your own individual conscience and how good a return on investment you will get as to how much fireproofing etc you install.

The principle is this - you convert the place very quietly and simply into two flats.  Tell the council tax people what your doing but nobody else.  Then rent the flats out on seperate ASTs and bite your nails for 10 years.  After that time has expired and you haven't had a court order then you have two legally seperate dwellings.

A couple of experience-based hints: don't rent to HB tenants, the housing officer will make merry hell for you.  If you quietly live below the radar, don't pi55 off the neighbours, make sure the council tax is paid, and stay out of the way of the housing department you stand a good chance of getting away with it.

The potential downsides are:

a) tenants dying in a fire if you make a hash of the design and/or fire safety precautions 

b) housing kicking off, in which case you'll probably have to restore it to a single dwelling.  They'll do this either by an enforcement notice, or the slightly snidey route of putting an HMO license on the place restricting it to one occupant.  This can ruin the saleability of a building as it actually legally precludes a family or even a married couple living there.  Both these routes are fairly unlikely, however, as they are far too busy targetting studio flats with 10 albanians living in them.

c) planning enforcement, pretty much the same as above

You need to balance the risks here against the potential savings, and allow for some or all of the above consequences to happen.  If you do it right, your chances are good, but for gods sake take the safety of your tenants seriously.

I hope this helps clarify the issue somewhat. 

That's great thank you. Just one quick final one - I'm a bit reluctant to speak to the council tax people as you suggest becuase won't they talk to planning - or is it that they just never communicate? Is the reason you suggest informing CT so that I have an official date for the split - I can't just use receipts from the builder and photos as proof?

 

Just to put my two pennyworth.......When I extended and converted my property into 4 flats in the early 90's it was registered as a HMO but as I've mentioned previously,on the turn of keys the house became 4 separate self contained units.At the time I was a builder and due to recession I had little work but with income from tenants could see this as my only option to retain the property.

Following a visit from E.Health, I was informed the property didn't conform to a HMO and I'd either have to bring the property up to standard(fire doors,means of escape etc etc.)or ask the tenants to vacate.I told them I had little money and if the tenants had to leave my only option would be to claim benefit myself.There reply was that if I could prove my situation, a grant would be made available and if I submitted a competitive quote then I could carry out the works.The funny thing is,it was me who had to ask other builders to quote before accepting my figure!!!

Yearly inspections were carried out by E.Health and some years later,when I applied for retrospective planning,my solicitor dealing with the matter asked E.Health to confirm there had been 4 self contained units for the said number of years (has to be at least 4 years) which they duly obliged.

Some of my tenants were on H.Benefit and on their application form it asked what type of accommodation was being provided, with a tick box for "flat within a house".I don't know what the rules are now but then I'm pretty sure that you could only have up to 6 other persons than your own family living in a HMO property.

I'm sure someone will correct me if I'm wrong but it maybe the case that to get retrospective planning for this type of development now,not only do you have to prove the 4 year rule but council tax for each unit has to be seen to have been paid for this period also.

 

Bill 

BTS King and Bill - thanks a lot - have PMd you to say thanks properly.

Hey Everyone,

 I am planning on buying a 3 bed house and convert into 2 flats. My major concern is obtaining the planning permission. I would defianetly have to move walls to create space for a kitchen and bathroom on each floor. How easy to obtain the planning permission and what is the best way to go around this. The property will have front and rear gardens, and on road parking. What if the property was leasehold, would i have any issues then, or will i need to obtain the freeholder's permission first. I will be selling the 2 flats off after complition, so there will be no shortcuts. Any suggestions and past expereinces are more than welcome.

My advice - walk away.  This is not a market for you to be taking on a horrendous project, particularly when you're trying to sell flats at the end.

Conversion projects are always a massive learning curve for first-timers, and in the current market you need razor-tight margins and total control over costs and timescales.  You also need a decent product at the end with at least 25% real equity.

The fact that the house is leasehold is a little troubling - all in all I'd say this really isn't worth the aggrivation particularly given that you will have to sit on the place, in all likelihood, for the best part of a year waiting to get planning permission, in a falling market, and then having to do a horrible conversion at the end of it.

Stick your deposit in bank shares, pick a small one with low dependence on CDO's (collateralised debt obligations) - this is a real test of solvency and will show you the winners to back when the current storm has subsided.  This will, in all likelihood, make you more money than doing the project you describe.

You're dead right I bought a house three bed last July to convert into flats its a terrace victorian three bed.It was bought to make into two flats for myself to live in with my mother below. We have done it the legal way its cost an arm and a leg and I had to borrow an extra 50k to cover the ridiculous costs of builders,plumber,electrician,plasterer, windows,accoustics,carpentry and the cheapest kitchens which is still not cheap.I would say yes WALK away as I've lost I'm not standing at making any money if I have to sell. Would have been cheaper to buy two flats already done.

 

Only thing is we would have had two smaller flats and they wouldn't have been victorian but hell if I was a man yes I would be bald .