Posted on 19th June 2015

When Two Become One: Buying a Home Which is also your Place of Work

Martin Williamson, Head of Residential Property

Many people dream of owning a home which will pay its own way. Some may have always wanted to open their own BB in the countryside, while others may yearn to run an equestrian business or kennels. Living above the shop is another option for those wishing to uphold the countrys reputation as a nation of shopkeepers.

There is a growing market for property which doubles as a business among those who want a change of lifestyle and the flexibility afforded by being their own boss. It also considerably cuts down time spent on the daily commute.

But, buying a home that comes with a successful business already up-and-running will come at a premium, so its important not to get swept up in the excitement of such an opportunity. Look at whether each element of the property is worth the asking price: What is the house worth without the business? Will the business yield the profits that you need it to for the lifestyle you want?

You also have to consider whether you can realistically cope with the demands of the business, particularly if you have a day job too while you are getting your new venture off the ground. Running a BB for example requires cleaning, cooking breakfasts, general maintenance and greeting guests at all hours of the day.

Finding a property which meets both your commercial and residential needs is a challenge. It could be that there are acres and acres of space for animals in a smallholding, but a property which is too small for your family. Widening out your search to property which ticks only some of your boxes rather than all will help. It may be you can build an extension, or buy more land from a neighbouring farmer, for example.

Throwing a commercial element into the mix can also complicate matters when it comes to getting a mortgage.

Which lending options are available to you will depend on whether the property you are looking at is classed as commercial, residential, or a combination of the two.

Generally, commercial mortgage rates are not as favourable as residential, and will be based on the track record and potential of the business you are looking at, as well as any other household income.

It may be possible to find a lender to give a mortgage for the whole property. Or, you may be able to take out two mortgages, opting for as big a mortgage as possible on the residential element to take advantage of cheaper borrowing rates at the moment, and then funding the rest with a commercial mortgage.

For those establishing a completely new business on site, lenders will rely on any existing household income rather than the business being able to meet repayments. Once the business is established, it can service borrowing.

Seeking specialist advice as early as possible in your property search will give you vital knowledge about options for funding your dream, avoiding any disappointment faced if you look at properties which are out of your budget.

For those who do manage to make it work, buying a residential and commercial property in one can provide the home, lifestyle and career they want.

Martin Williamson is Head of Residential Property at Latimer Hinks Solicitors in Darlington. Latimer Hinks has a team of around 40 people serving private and corporate clients. For further information: www.latimerhinks.co.uk or call 01325 341500.

Please note: This article is intended as guidance only and does not constitute advice, financial or otherwise.

For further information please contact Martin William