Split Folio

Hi,
I bought my first house last year that has a side garden intending to split the folio and build a new detached house on it. I'm only a year into the mortgage, I have planning and I approached the bank about permission for the property folio change. They are talking about problems with the LTV which surprised me as they view the possibility that I wouldn't sell the house so have to abide by central bank rules. My plan was to split the folio, sell the house, keep the garden, apply for self build mortgage, sign contract with builder and build the new house.
Just wanted to ask if anyone out there has any insight into this and any questions I could ask / ways to help move my project forward? Thanks.

Is your intention to sell the house first, and then build?

Yes, can't have two mortgages as I've only just started paying off the current one. So, sell house, discharge 1st mortgage, then draw down 2nd new self build mortgage later and build. Thanks.

Why not take care of the folio split at the time of the sale?
I'm guessing here - not something I've seen, but a chat with your solicitor might help.

You'd need to establish physical boundary before selling your house.

By the way, having a building site next door would put off some buyers, so be well prepared with a timeline, etc so they know how disruptive it might be.

The LTV CBI rules is a bit of a red herring as far as I can see. Especially if you leave the bank with charge over both folios.

That's what I was thinking, tie both folios together so the aggregate value gives them comfort. Will check into splitting at time of sale. Understand about the building site but I don't have funds to build alongside current mortgage and don't want to wait 10 years to build up funds living in an older house. Hoping for patient and understanding buyers!