Finance for new build on existing property grounds

[NickyB1975]

I am hoping to build a house to live in within the boundary of my existing property, as it has a substantial garden. The plan is to live in my existing property that has enough equity to build the new house outright, whilst the build goes on, and then move into the new one and sell the old one, thus paying off any monies lent. Permission, planning and build etc will be undertaken by a family member (already has lapsed permission) but the issue is how/where do I get a loan or l release the equity to build? My mortgage provider doesn’t seem to be interested and it seems no high street banks do bridging loans, at least at the moment.

[Mr Punter]

I think you may have to sell your existing house and rent while the new one is being built.

[NickyB1975]

Thanks. I would need to obviously fence off the part of the garden first that will be built on, and I'm guessing that deeds need to be altered to show the new grounds on the existing property to be sold, would that be through the planning dept at the council and solicitors?

[Hargrid]

Try Mayflower Mortgages, they get good reports about being very flexible on finance. 

https://www.mayflowermortgage.co.uk/

[NickyB1975]

Thank you very much, the ball is rolling and no doubt I will be back on here from time to time.

[Rick K]

12 hours ago, NickyB1975 said:

Thank you very much, the ball is rolling and no doubt I will be back on here from time to time.

Did you contact Mayflower?

[NickyB1975]

No not yet I’ll be trying them in the week. Managed to track down an old friend who was an Estate Agent and then moved into the property game, I’m hoping to get some advice from him this weekend, will add any info on this thread. 

[Oldsteel]

Did you resolve this question? If not I can recommend our finance company, who were flexible and supportive throughout our buoild. We were in the same position as you, building on a plot bought with our house, and sold off the house when the build was complete. The paperwork was pretty intensive, but once we got through it with the help of a friendly broker at all went very well.

[Bournbrook]

On 19/03/2023 at 19:15, Oldsteel said:

Did you resolve this question? If not I can recommend our finance company, who were flexible and supportive throughout our buoild. We were in the same position as you, building on a plot bought with our house, and sold off the house when the build was complete. The paperwork was pretty intensive, but once we got through it with the help of a friendly broker at all went very well.

Hi there. This is what we’d be looking to do. What finance company did you use? Was it a bridging Lon or self build mortgage? 
we have a lot of capital in our current house, but still have a mortgage on it and don’t have much cash!! Would much prefer to stay in current house whilst we build if we can. 
Would be really grateful if any advice since you’ve been through this. 
 

thanks 

[Oldsteel]

Our finance was a development loan, effectively a bridging loan. It suited us because we couldnt satisfy the income requirements for a self-build mortgage, but did have equity in our house that we could borrow against. Whilst the interest rate is higher, you only pay interest on the amount drawn down. The company we were recommended was not the cheapest in terms of interest, but were flexible and were not 'breathing down our necks' at every stage of the development. Some providers we spoke to wanted us to employ a QS to examine every item of spend, that wouldn't have worked at all as you have more than enough to cope with when doing a self build. Happy to advise further, it all worked out for us and we are now happily living in our new house.

[Bournbrook]

On 17/04/2023 at 11:17, Oldsteel said:

Our finance was a development loan, effectively a bridging loan. It suited us because we couldnt satisfy the income requirements for a self-build mortgage, but did have equity in our house that we could borrow against. Whilst the interest rate is higher, you only pay interest on the amount drawn down. The company we were recommended was not the cheapest in terms of interest, but were flexible and were not 'breathing down our necks' at every stage of the development. Some providers we spoke to wanted us to employ a QS to examine every item of spend, that wouldn't have worked at all as you have more than enough to cope with when doing a self build. Happy to advise further, it all worked out for us and we are now happily living in our new house.

Thank you. 
 

who did you use? Do you remember what the rate was and when? How long did it take to arrange?

 

thanks again