March 17, 20233 yr Having finally secured our planning permission last month (which has an agric tie attached) I have discovered that securing funding is not going to be straight forward because of the agric tie. The Build Store has directed me towards Scottish Government's Self Build Loan run by the Communities Housing Trust. Has anyone been down this route and happy to share their experience? How easy is it to secure a lender to pay back the SG loan once the house is built? Knew there would be speed bumps on the way but didn't expect this one. Many thanks in advance.
March 18, 20233 yr 13 hours ago, JennyF said: I have discovered that securing funding is not going to be straight forward because of the agric tie. No experience with respect to self build funding, but for a standard mortgage the bank should be OK as long as the encumbered valuation is used for calculations, ie.30% - 40% discount on the open market valuation. Is Build Store just saying "no", or are they disagreeing with the valuation. Getting a mortgage on an agricultural occupancy restricted property "should" be OK, once completed, as long as valuations are agreed, but there may be less products to choose from so expect to pay a little more admin fees and interest. Worth checking with some high street lenders first though in case the market has shifted a little since I'd previously looked into this. Edit: Just to add, the lender will expect you to prove you meet the terms of the AOC. Edited March 18, 20233 yr by IanR
March 18, 20233 yr 19 minutes ago, IanR said: Edit: Just to add, the lender will expect you to prove you meet the terms of the AOC. Agree with this. @JennyF if the land is big enough to support agricultural development (or someone living in it is full time working in agriculture) then it’s worth looking at farm business loans and mortgages as you may be eligible that way.
March 18, 20233 yr 23 hours ago, JennyF said: Having finally secured our planning permission last month (which has an agric tie attached) I have discovered that securing funding is not going to be straight forward because of the agric tie. The Build Store has directed me towards Scottish Government's Self Build Loan run by the Communities Housing Trust. Has anyone been down this route and happy to share their experience? How easy is it to secure a lender to pay back the SG loan once the house is built? Knew there would be speed bumps on the way but didn't expect this one. Many thanks in advance. I did consider it but was put off by the 9% rate (which might be different now) if you exceed the timeframe agreed upon. Also, the amount you could borrow was a bit less when we were looking to build, at £125,000. We went with the Scottish Building Society and supplemented it with a croft house grant.
March 18, 20233 yr Google found.. https://www.esbs.co.uk/self-build-mortgages/ Quote The Criteria For a Self Build Mortgage We can even consider a self build project where planning permission has been granted and is subject to an agricultural tie clause, or a Section 106 occupancy clause.
March 18, 20233 yr More from Google.. https://www.yorkshirepost.co.uk/lifestyle/homes-and-gardens/permission-land-1821986 Quote Sourcing a mortgage is a problem faced by many self-builders and the agricultural tie was an additional turn-off for the big banks and building societies. Fortunately, the Yorkshire-based Ecology Building Society was more than happy to lend, and it offered preferential terms for eco-friendly properties.
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