Can we convert two homes into one?

Q: We live in a Victorian terrace, and our neighbour’s property is up for sale. Our family has outgrown our home and we’d therefore like to enlarge it. Would it be cost-effective, practical and even possible – from both a planning and legal perspective – to knock through to next door to make one large property?

We would also like to know whether we would need to list it as one single dwelling and how this would affect the resale? We would ideally hope to sell on as two separate properties, or perhaps even four individual flats, at a later date.

A: Assuming the properties are not listed, knocking the two into one does not constitute a material planning consideration and therefore falls outside the scope of development control — so no application is necessary. All of the work will, however, have to comply with the relevant parts of the Building Regulations.

There will be some cost involved in linking the two electricity and gas supplies should you choose to do so. This would only be necessary to avoid two sets of standing charges, for instance, but it would be preferable for a single property to have a single consumer unit and gas safety shut-off valve.

The work is unlikely to be cost-effective unless you happen to live in a very small property in a high-value area, characterised by larger properties. In most locations, the two properties are likely to be worth more than a combined single dwelling. However, this may not be the only consideration, as the option may suit your living requirements, and could possibly be reversed in the future when you want to sell.

You would need to consider the issue of Council Tax, which would be greater for the enlarged property, but still less than having two separate Council Tax bills. In order to disaggregate the second property – have it removed from the Council Tax list – you will at the very least have to remove one of the kitchens completely in order for it no longer to be deemed as two separate dwellings.

You could resell the property as two separate entities, or unite the titles into one. If you have the funds to buy without a mortgage, this is unlikely to be an issue. If you are raising a mortgage against each separate title there will, however, be legal issues as you will not be able to unite the properties into one whilst still having separate legal charges on each. For this reason, future buyers are likely to find it easier to buy the property if it has a single title, especially if they require mortgage funding. It’s also worth noting that there is a charge for uniting the two titles at HM Land Registry (landregistry.gov.uk).

If you were later to decide to subdivide the property into four flats, you would need planning permission, as you would be creating two (or three) new dwellings through conversion. You would also need to split the titles and create separate freeholds or, more likely, four leases and four shares of the freehold. There would be further fees incurred for this, both from HM Land Registry and from the solicitor you employ.

One bit of good news: all work that involves a change in the number of dwelling units, two to one or one to four, for example, would be eligible for the reduced rate of VAT of 5% if the work is undertaken by a VAT-registered contractor.

Further reading:

• See more Expert Advice in the Community Section
• Converting Four Period Cottages into One Home
• How to Make Small Spaces Bigger (Without Extending...)