Property tips for business owners

Buying or renovating property when you’re self-employed

Buying a new property – or renovating your current home – while running a business? We can help you cut the stress and speed up the process with these 5 essential tips.

Moving house can be an all-consuming, not to mention stressful, task for any home-buyer – but for business owners it can be even more trying.

We take a look at the steps you can take to help streamline your next property purchase, while balancing the needs of your business.

Get your financial records in order

Preparing your finances while you’re still searching for a property that suits your needs reduces the time it takes to complete the mortgage process.

Take a look at your credit report with a credit-reference agency – such as Experian, Equifax or Callcredit – to make sure there are no inaccuracies.

If your rating is not as good as you were hoping, there are steps you can take to improve it over a few months. It could be as simple as keeping up-to-date with loan and credit card repayments and making sure you’re on the electoral roll.

Mortgage lenders are also likely to want details about your outgoings and discretionary spending, so it’s a good idea to start keeping a record of these each month. Explore our money management pages to see how we can help.

Check the rules for self-employed borrowers

In the past, business owners could apply for a self-certification mortgage without having to provide proof of income. However, the Financial Conduct Authority now requires lenders to verify the income applicants declare.

According to the Council of Mortgage Lenders, lenders will want to see at least 2 years of audited accounts for your business1.

Lenders will also want to see your SA302 form, the declaration of income and profit you submit to HM Revenue & Customs. Getting this paperwork together can help you speed up the mortgage application process – and make the difference between your application being approved or denied.

Think about tax implications

If you do decide to run your business from your home you could qualify for a number of tax allowances. These include being able to claim back a portion of expenditure on heating, lighting, and broadband, as well as council tax.

Mixed-use premises – properties with both residential and commercial uses – also qualify for lower stamp duty land tax rates. These range from 2% to 5% on the proportion of a property valued over £150,000, compared with a range of 2% to 12% charged on values above £125,000 for residential sales.  It’s worth noting that HMRC only accepts mixed-use stamp duty land tax rates on properties that are purpose-built as mixed use2.

If you do base your business at your home, you may be liable for capital gains tax on the part used for business when you sell it and you may also have to pay business rates. You should get independent advice before considering this option.

Consider future business growth

If your business is expanding, you may want to renovate part of your new home or garden to include an office or workspace. 

The benefits of basing your business at home can include reduced overheads and tax advantages, but you will need to consider your home insurance, renovation costs and planning permissions.

You shouldn’t need to apply for planning permission for internal alterations, including building or removing an internal wall, although you may need building regulation approval. Under certain circumstances, you can also build an extension without needing planning permission3.

Individual requirements vary but, as a general rule, building a single-storey extension that does not extend more than 3 metres from the rear wall of the original house is usually permitted without planning permission.

If you want to convert a garage into an office, you’ll need to check with your local planning authority.

Consider how you’ll fund it

If you’re looking to move home, remember that you might be eligible for our exclusive Premier mortgage rates, so don’t forget to check.

Alternatively, if you’re considering a renovation, you could borrow more on your current mortgage with additional borrowing. You may be able to borrow up to 85% of your property’s value, but it’s important to note you may pay a different interest rate on the new amount. 

You can also consider a personal loan. If you're eligible for Premier, you could borrow between £1,000 and £50,000 with a Premier Barclayloan, which is available for terms from 2 to 5 years4. Eligibility criteria applies.

The rate you’re offered will be based on your personal circumstances, the loan amount and the repayment term. All loans are subject to application and status, and early settlement fees may apply. And remember that your home may be repossessed if you do not keep up repayments on your mortgage.

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