We are a young couple (35 and 28) who are currently in the process of building a holiday home in Scotland which we hope will eventually provide enough of a return to allow us to buy our own home (We currently live with my parents). I am self employed and my partner works full time.
We own outright the plot of land which has planning permission for a single storey holiday home. We have utilised (with our own cash) the services of a local builder to construct the foundations which are now almost completed and we have quotes from other builders for the construction of a timber frame, windows and roof to get it wind and water tight. We hope to then do most of the remaining work ourselves, bringing in contractors as and when required.
We would like to ask your advice on the best options for funding to help us complete the remainder of the project the bulk of which can be done for around £120k, but we initially would need around £65k to get the frame and roof up to wind and watertight stage. We can probably get a couple of personal loans and utilise our credit cards etc. but would prefer one single loan at a reasonable rate of interest over a longer payment period. The difficulty we have found is in securing a loan for a holiday home which many of the lending companies are unwilling to do and those that are willing - usually for commercial builds - appear have exhorbitant lending rates.

Any advice would be greatfully received.

Unfortunately commercial ventures do require a commercial lender At a higher rate 

Personal loan and cards may be a better option 

What makes you think you will make any money from a holiday let. 
I have two, unless you own it outright, live on site and do all the change overs and maintenance, then how are you getting bookings. What percentage do they take. 
 

why not look at changing the planning to a permanent dwelling and living there. 
 

sorry but I cannot see this as a money making scheme. 
 

alternatively you own a plot outright with planning on it for a holiday home, sell it know to someone with the dream and funds to do it, buy a plot for your own home for which you can get a self build mortgage. 

13 hours ago, MDoherty said:

process of building a holiday home in Scotland which we hope will eventually provide enough of a return to allow us to buy our own home

Dream on, have you done a business plan, researched the whole thing.  We had a couple of properties, they did not make much money, booking agent fees, cleaner, utilities, accountants all use up any profits.  You also now have a 100% levy on council tax (pay twice as much).

Okay. Thanks. Sounds like your dream turned into a nightmare.

Thanks everyone for the advice and information. We live next door to the site and by keeping loans to a minimum, looking at local holiday rental prices, doing all the associated holiday let work ourselves (my family has previous experience of this), offering a unique luxury holiday experience,  etc, we think we could eventually secure enough finance for a home of our own. The option to change of use is something we've recently considered but are not sure if our planning office would be sympathetic to this. We would like to be able to build the house to leave us with both options should planning block this route. It looks like we are probably best applying for personal loans and work from there. It's a pity most lenders work on a "tick box" basis and are unable to look at the situation as a whole! Computer says "no"!

Why not miss out the holiday let, and go straight to building a modest house or bungalow to your current or slightly modified design. Wouldn't cost any more than the holiday let.

Yes, thanks. Unfortunately due to local planning restrictions we are not currently allowed to build a residential house on the existing plot. It may be something we might have to consider at a later date possibly through a change of use but we'd like to get the house completed first before looking at other options.