Home Folio into 2 Query , advice

[greyser]

Any sols logged on might have an idea,

How difficult is it to seperate portion of principal home/single folio into 2,
as want to set up/build small business via standalone building at rear of garden (build cost 130 k approx, area 20 x 40 ft approx). Section off rest of rear garden and home into other folio.

What i've been told (First active) is that as commercial lending/t&c's would apply as business is a commercial entity. extending homeloan is not an option. Their commercial lending cannot lend against home folio, so no help what so ever.

Therefore basis behind splitting folio, to raise money hopefully easier to fund business (build cost primarily) and leave existing home folio as is. Also useful to have seperate loan against business and seperate totally from family home.

Any thoughts appreciated, not even sure if above is possible

 

[Vanilla]

It is a very easy and simple application to the land registry to split a folio. You will need a land registry map certified by an engineer showing the two plots. Then you just lodge an application to the land registry to split. If there is no home loan currently on the folio, that's it. If there is a home loan, you will need the banks consent to subdivide and a partial discharge of the mortgage against the part you wish to have a business on.If your folio is in your sole name, you will need your wifes consent, if joint names it will be ajoint application.

As to whether it is wise to do so, I suppose it would depend on the proximity of the 'business' part to your home, and how the value of your home would be affected if that part were irretrievably seperated by repossession or sale.

 

[greyser]

thanks vanilla for the reply
'you will need the banks consent to subdivide and a partial discharge of the mortgage against the part you wish to have a business on'

what exactly do you mean, understand in principal bank/building soc need their consent to subdivide but partial discharge bit ?

thanks again,

 

[Vanilla]

Just that if there is already a home loan mortgage charged against the property, the bank will have to discharge the home loan from that part that you want to subdivide and have your business loan on.