Mortgage on Land purchase STP Scotland

[MGDK_house]

Hi all

 

Currently finalising missives (contract of sale - Scotland) to purchase our land which is subject to planning and finance. The next step will be to put planning permission on the land then when planning is in place we can apply for the self build mortgage which will cover part the land cost too (we have £100k cash, the land price is £250k. Buying the land outright isn’t an option for us)
 

The sellers asked for 6 weeks from planning approval to complete the sale however my financial advisor said we need minimum 12 weeks and ideally 15 to get the mortgage application through. My lawyer is now negotiating this point with the other side. They have agreed to 12 weeks but not 15. My financial advisor feels uncomfortable with this. The position would be that the sellers could then walk away if we don’t complete within this time frame, we would lose the sale and all of the money (£30k+) time and effort that will have gone into the project by that point. They will be left with land that has planning on it, so more valuable. 
 

Has anyone got any experience of a similar legal contract? are there any loop holes we could add in to further protect ourselves if there were any delays outwith our control? Has anyone got experience with mortgage application timelines? We are looking at buildloan and will prepare all we can upfront including costings, ready to apply as soon as planning is in place. 
 

Any ideas, experiences or suggestions are welcomed! 
 

Thank you. 

[Conor]

Who is your mortgage provider? We went with ecology and everything was completed in 6 weeks. 12 would be worst case, and assumes you've not got your documents etc together. If you and broker are on the ball, no reason why an application would take more than 8 weeks. You can start that all now, ask what the provider will require and start putting it together in a folder.

[MGDK_house]

Thanks for your reply, this gives me some reassurance. We are looking at buildloan and our agreement in principle is with Newcastle building society, but this could change when we come to apply. I’ll do as you advised and start gathering everything up front now. Thank you! 

[Bozza]

Also in Scotland and bought land prior to PP (but it did have a house on it already).

 

My strong understanding based upon my solicitors explanation is the missives are really just the written certification paperwork in respects of what is by that point a legally agreed deal.  As such should a seller pull out of an agreed sale prior to missives being completed they the seller would be 100% liable in litigation for any costs incurred.  This is why it’s rare in Scotland to get gazumping etc or agreed sales not going through.   Even a verbal agreement in Scotland can be legally binding but obviously all the written paperwork makes it more certain.  The sellers solicitor would be telling them that should they be tempted to do the dirty.   Does your financial advisor know this ? Possibly not.   My solicitor also told me that sellers who do the dirty like this thereafter struggle to get representation as it’s frowned upon strongly in the industry and there’s reputation damage for the sellers solicitor.   I get the impression that the legal profession in Scotland are keen to prevent some of the ruthlessness that can occur down south with such transactions.    But your solicitor should be able tell you how thing stand in your area.  Frankly both sellers and buyers solicitors are like anyone else they just want the deal to go through, they get their fee and move on.

 

In terms of your loan I dealt with Buildloan / Santander to purchase my plot but then used Ecology for the self build mortgage.  100% would recommend Ecology they were superb to deal with.  
 

@Conor ‘s suggestion to collate all necessary documentation in advance is a good one.

 

In terms of speed personally I have found using bigger solicitors firm far slower than using an individual solicitor.  Because so many individuals are involved in the process.