Multi-generational living arrangements

 As we regularly hear of our ageing population, multi-generational living appears to be making a comeback and more frequently a serious consideration of families trying to avoid need for residential care.

Residential care homes can provide social benefits to occupants that would otherwise suffer isolation but in some cases living amongst the family can have equal or greater benefits.

We have been approached by numerous clients for advice and assistance in how to make provision for both multi-generational living within one dwelling and in other situations where there is an annex or separate buildings on the same site providing more than one dwelling and problems with securing finance on mixed residential/commercial sites.

An example of this is a farmhouse being occupied by a farmer and his spouse and need for the farmer's son and family to also live within the farmstead. There is insufficient room for the son and his family to live in the farmhouse and so this could be achieved by either (a) an extension to the farmhouse (b) a brand new build dwelling or (c) conversion of a farm building into a dwelling.

This situation can give rise to difficulties in securing borrowing - the underwriting criteria for mixed use sites can be prohibitive, the market for lender willing to consider mixed use sites as security is narrow and interest rates can vary considerably for residential versus commercial loans.

Moreover, there is potential loss of first time buyer benefits such as government Help to Buy ISA schemes and preferential Stamp Duty Land Tax arrangements for the son.

Similiar difficulties arise for clients with mixed use sites where they reside on site e.g. a property comprising a holiday park with it's own services and a residential dwelling. In this scenario, it is unlikely tjhat a residential mortgage could be obtained by a client upon the dwelling.

The process of subdivision is what we use in development sites for the sale off of plots and can also be put to use in the scenarios above.

Subdivision is where the title deeds to the property are divided from one single title into two or more titles.

In practice, the properties may already run independently of one another but the legal considerations are complex. How easy or difficult the subdivision is to document will depend upon the particular site and matters including whether the property is already registered at the land registry, whether the properties are adjoining, access arrangements and utility/service supply provisions.

This article does not consider any planning permission or similar considerations (which we can advise upon on a case by case basis) nor tax implications.

For more information, please contact a member of our Agricultural or Property teams at any of our offices in York, Selby, Malton or Pickering.