Buy to let or remortgage for rental purposes and would family be a multi occupancy

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  • Buy to let or remortgage for rental purposes and would family be a multi occupancy

    Hello,

    I have a property that I used to live in but currently renting it out-right. Now I need to remortgage for rental purposes. Is that a remortgage or but to let?

    Also i went to Natwest and they think its a buy to let and approved the application but having waited over 7 weeks with the survey done last week, after numerous calls to them and none from them to us and them saying they will 'offer' the document, they have declined just when we need funds for next week.

    The reason why Natwest declined

    The surveyor (he got booked by Natwest after 6 weeks) in his opinion thinks that that the property is multi-occupancy as there are locks in the internal doors.

    We reponded by saying that the property is let to 1 person as named on the AST and that he has family members living with him, as it a house with 4 rooms with 2 on the ground floor namely reception rooms. This is the question we asked before taking on the tenant as to who will be residing in the property. We did not want various different people living in the property as this bring various problems even though there is a potential to make higher rent or them potentially subletting.

    We also said the property has had locks for over 15 years and before we moved in. There is sash lock leading to the kitchen and utulity/bathroom area. There is also lock on the cellar - currently locked by me and not habitable. The is also a loft with steps leading to it but has no door hence open access to anyone but not classified as bedroom.

    Is having a lock on all the doors classify it as multi occupancy?

    I know of many houses that have locks on all the doors. Does that make them multi occupancy? Even though its only family with children residing there? I did get a couple with their parents and 4 children, Would that have been classified as multi occupancy even thought it had locks on all doors?

    My reasoning as to having locks on doors is for privacy and safety. Who would want someone entering the room at the wrong time or snooping around other family members stuff without their permission. This creates tension and problems hence the locks.

    We also asked why it took them 6 weeks for a survey but got no proper answer. We also said if they had told us in the first 2 weeks, as it seems is sufficient to get an answer from the various replies, then we have had gone elsewhere but to keep as hanging saying they will 'offer' as soon as they get a decision is not acceptable.

    Thank you and seek advice to this dilemma.

  • #2
    It is a bit of a limp excuse unless the valuer seriously thought the property was set up for multi occupacy. Can you not remove the locks and then go back to NatWest.

    Second question is what types of locks are they, the normal mortice type you might have in Victorian style premises or 'Yale' type rim locks, because if it were the latter I could see why he may be noting that.

    If it is only to be rented to a single family tell NatWest you are happy for that to be a condition of the advance and you will even let them have a copy of the AST each time the tenant changes, that should make them happy.

    On the other hand if this is just an excuse you will need to look for an alternative lender, and I would also be asking for a proportion of the valuation fee back because if there are locks on all the doors the valuer would have seen that early on during the inspection and may not have undertaken the full survey.

    Do bear in mind that your tenant who presumably was there when the property was valued may have said something that supported the valuer's multi-occupancy claim, you have let it to a single family haven't you?
    CFA

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    • #3
      You ask if its a Remortgage or Buy to Let. It is both a Buy to Let Remortgage, the "remortgage" bit is just if you owned it previously which you did the "buy to let" is because you are letting it out, not intending to live their.

      THE AST could be false you see, they send the surveyor down and he says theirs locks on the doors. Now we are no longer looking at a single Buy to Let but a HMO (if shared kitchen/wc's) or a Multi Unit. These are specialist lends (Natwest actually does HMO's but different app).

      "I know of many houses that have locks on all the doors. Does that make them multi occupancy" no. It makes them look like one to a surveyor.

      You need to remove all the locks. In a family home their is no need for "proper locks" on access to kitchen, bathroom and cellar. If its a multi-unit and you need refinance, you will have to bite the bullet not trick a lender and unfortunately have higher rates.

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      • #4
        Thanks for the reply

        YesAdam- 'THE AST could be false you see', -how do you mean the ast is false?
        (Natwest actually does HMO's but different app). - they didn't tell us about it, if we discover its a hmo and then we would go down this route, if natwest force us. But we will have to question the tenant first as to why he lied.

        'You need to remove all the locks. In a family home their is no need for "proper locks" on access to kitchen, bathroom and cellar'. 'I have always had locks 'sash lock' 3 lever from the time I bought the house -Victorian house. Surely bathroom needs a lock from the inside. I don't go to the toilet without locking the door. For individual rooms, there needs a privacy aspect. On the side of security, I used to lock the rooms when away from the house, if an body does break in, it take them longer to go through the property. Without locks, its a quick job. Even the police advice lock the doors, I take it to the internal doors as well.

        'If its a multi-unit and you need refinance, you will have to bite the bullet not trick a lender and unfortunately have higher rates.' Its not a multi-unit, just one whole unit house. I was looking for 4 people, max 5 people before I let it to this person and the family, as multi-let was too much work and hassle.

        I did tell Natwest its rented to a family and relatives, as being a 4 bed house, a couple cannot afford to take on the property unless they have other family as well. But they were not interested and took on the surveyors report as final.

        You may be right the tenant may have said something. I will have to try and find out. Mean while I need to seek other buy to let and when the survey needs to be done, I will have to be present, obviously have given 24hrs notice. Can the tenant deny me entrance, if I say I will need to be there as well or does not allow access to me or the surveyor again?

        Thanks

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        • #5
          dindin - if you can find out who the surveyor is, they could well be on another lender's panel so it could save some time, but it still has a value however its letting is configured.

          I would suggest when you talk about a 'family and (their) relatives' that is what flagged things up. You can have one tenancy and multiple people but you are on the edge of it being an HMO or deemed to be one by the local council, whether it also needs licencing will be dependent on local rules and regs too.

          A thumbturn lock on the bathroom won't cause any issues, it's locks on all the others that has flagged this up, and of course how the tenant may have inadvertently answered the valuer's question.
          CFA

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