Has anyone here used a mortgage for a plot purchase?

I'm scratching about a few plots at the moment to try and get my "house-made-up-of-many-sheds" idea built.

Whilst I have a good lump of savings that I could access, has anyone done this on borrowing? I'm sure buildstore said this was technically possible previously but I wonder if it's also practically possible?! ?

Kinda.

 

We bought a house with a residential mortgage and 20% deposit.

 

Then we decided to knock it down and build a new house.

 

Went to Ecology and they said they'd mortgage the site once FPP granted. Luckily they valued it the same as what we had on the residential mortgage... so we were able to drawn down 80% of the site value from Ecology and pay off the residential mortgage. I'm sure they'd do the same for a building site as long as it has outline PP.

 

That then means we age able to keep the bulk of our savings and build ahead of the normal draw downs. E.g. we have the cash to get to watertight stage, but will get a valuation and drawdown ahead of that so we always have enough cash for the next stage in advance and don't have to be relying on drawdowns to pay people.

 

Interesting approach, unfortunately I won't be buying a house, I'm hoping to convince some people to sell a bit of land off market!

The plot will need full planning consent, as the lender does not want that risk.  Typically they will not lend a high percentage on the land and they will want costings for the rest of the project and how you will finance it.  They don't want to get stuck a half completed project where the borrower runs out of money and it becomes the lenders problem.

 

See if they will agree to an option, where you agree a price on the basis of achieving consent.  You could persuade them that you are more likely to succeed as you are in the business.

5 hours ago, the_r_sole said:

Interesting approach, unfortunately I won't be buying a house, I'm hoping to convince some people to sell a bit of land off market!

 

You could buy three allotments with sheds, then it would look the same ? .

Would not even need a haystack to hide it.

Edited September 18, 20206 yr by Ferdinand

17 minutes ago, Ferdinand said:

 

You could buy three allotments with sheds, then it would look the same ? .

Would not even need a haystack to hide it.

 

You've seen my plans then! ?

Yep got 80% on a plot through Melton BS that had existing planning permission. They were easy to deal with too. 

We got 80% for a plot through Ecology that already had planning permission. Completed a couple of weeks ago. Was a breeze to get the mortgage.