When it comes to combining two properties into one, the idea sounds wonderfully simple. Buy the flat next door or above, knock through, and suddenly you’ve got the dream home in your ideal location. But the reality, as one of our clients recently discovered, is that the process involves more than a set of keys and a builder’s hammer.
Our client, a solicitor living in a characterful period conversion, saw a rare opportunity when the flat above theirs came up for sale. Their plan was straightforward: purchase it, merge it with their existing home, and create one beautifully restored house as it once was. However, securing the property and funding the works turned out to be less straightforward than expected.
While the structural work required was minimal – removing a kitchen and reopening an existing staircase, the financial, legal, and logistical considerations were surprisingly complex. They needed to obtain planning permission, merge utilities, adjust council tax, and ensure all alterations were signed off by building control. Yet, their biggest challenge was financing the purchase efficiently.
The client approached a handful of high street banks and mortgage brokers. Most suggested costly bridging finance or a self-build mortgage. While a self-build loan can be ideal for more substantial refurbishments, this wasn’t a full structural conversion, just a sensitive restoration back to its original configuration.
Bridging finance, although fast and flexible, came with hefty arrangement fees and higher interest rates. For a project where the physical works didn’t warrant a complete rebuild, these options simply didn’t make financial sense. They were looking for a more considered route that would allow them to acquire the neighboring flat and manage the minor works without unnecessary expense or complexity.
At Private Finance, our role is to look beyond the obvious. We reviewed the property title and discovered that, although the building had been divided into two leasehold flats, the freehold was also held by the client. This opened up the possibility of structuring the finance against the freehold interest rather than the individual leases.
We identified a lender that was prepared to lend on the basis of the freehold alone, treating the building as a single entity. This meant the mortgage could proceed on standard residential terms, at competitive rates, without the need for bridging finance or a self-build product.
The result? The client saved tens of thousands of pounds in fees and interest, while being able to move forward with their plans in a far more practical and cost-effective manner.
Once the purchase completed, the works to merge the flats were done swiftly. With a new internal staircase reinstated and one kitchen removed, the home was once again a spacious single dwelling. Planning and building control approvals were handled seamlessly, and the property now benefits from a single council tax account and consolidated utility services.
Most importantly, our client secured the outcome they wanted, a larger, more functional home, without unnecessary complexity or inflated financing costs. The project demonstrated that with a thoughtful lending structure and careful planning, it’s entirely possible to make the dream of merging two properties a reality.
If you’re considering combining two properties into one, or looking for ways to manage two properties on one mortgage, it’s worth exploring all your options before committing to a lender. At Private Finance, we take the time to understand your plans, your property, and your long-term goals to find a solution that truly fits.
Contact our team today to discuss your unique situation and see how we can help you finance your next property project with confidence.
Disclaimer:
The information presented in our case studies is intended for illustrative and marketing purposes only. Some case studies may be based on multiple enquiries or hypothetical scenarios to demonstrate typical processes or outcomes. Not all case studies represent completed business transactions, and the inclusion of a case study does not imply that the business was successfully concluded.
