My wife and I own a house and based on current market conditions we have 350k equity in the property and a 125k mortgage.   We are fortunate that we both have a good monthly income and could very easily afford to service the debt on a land purchase of 300k, whilst still owning our current property.   The issue we seem to face, is that getting finance agreed quickly just seems to take so long and I want to understand whether there are other options out there, which would provide financing to enable purchase of the land.  Once you have secured the land purchase, then there are a plethora of lenders who will lend on a property that would basically be a 50% LTV.

 

Thanks 

sell your house move into rented.

I wonder whether you can get an increased mortgage agreed in principle? Just enough to convince the lawyers and sellers that you ‘have funds’. Or actually get the mortgage, preferably an offset one, so it’ll have no cost except for arrangement fee.

 

The conveyance could take a couple of months. Mine took a year. So, enough time to finalise finance arrangements. But you will need to prove access to funds. If it’s a competitive purchase, then the nearest you can get to ‘cash in bank’ will be best.

When we bought our first plot 20 years ago we just extended the mortgage before going to buy the plot, so it just gave us a pot of money sitting in the bank.  Back then it was called a "home owner loan" but done by the building society at the same rate and secured on the house. But the amount was much lower.  

Thanks for the replies.   We tried the 'Sell and move into rented in 2005' and spent 18 months looking, but found nothing, so apprehensive about doing the same again.   I think that works, if you are very flexible and have a good pot of cash.  300k these days, does not get you much in the Wiltshire / Berkshire area.

I suppose re-mortgaging is an option, but not sure what LTV you can re-mortgage too.  Would need to be ~ 85 / 90% LTV

 

Chat with a friendly mortgage consultant maybe?

When you say you found nothing, what do you mean? Do you mean you literally couldn’t find somewhere to rent or you couldn’t find somewhere that you liked? 
 

If money hadn’t been a barrier we might have kept the previous house and bought the land and started the build then sell the current property. But I reasoned that with the topsy turvy world we live in that was risk as who knows what might happen, war, interest rate rises, slowing housing market, recession etc. So we sold up, found a plot, bought it, rented a house.  This was back in June 2021. Since then there is a war, interest rates have gone up massively, the housing market is slowing, we may or may not be in recession. 😂 Call me Mystic Meg. 
 

 

Edited February 12, 20233 yr by Kelvin

Find a house with a big garden and building potential and take the risk?

 

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When you say you found nothing, what do you mean? Do you mean you literally couldn’t find somewhere to rent or you couldn’t find somewhere that you liked?

We didn't find any plots.  We were only looking in the North Dorset area at the time.

 

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But I reasoned that with the topsy turvy world we live in that was risk as who knows what might happen

I think you need to apply reverse logic.  Who'd have guessed house prices would rocket during a 'pandemic'.   

I’ve been looking for a decent plot around south and West Yorkshire for over 4 years and haven’t found anything suitable. Quite a few postage stamp size ones but I want something a bit bigger, but happy to consider a steep slope, poor access, difficult build etc. so I’m being pretty flexible and have a reasonable budget so dont be disheartened because you didn’t see anything immediately.