Essential Mortgages
SAVE ON MORTGAGES TO BUY LAND

SAVE ON MORTGAGES TO BUY LAND

FIND THE BEST LAND MORTGAGES WITH OUR TEAM OF EXPERTS

Feefo reviews RATED 5.0 OUT OF 5.0 STARS ON FEEFO

ADVICE FROM THE TOP RATED SPECIALISTS FOR MORTGAGES TO BUY LAND

FIND THE RIGHT MORTGAGE WITH EXPERT ADVISORS WHO CAN HELP YOU EVERY STEP OF THE WAY

Logo Logo Logo Logo Logo Logo Logo Logo Logo Logo

WE HAVE YEARS OF EXPERTISE IN FINDING BUYERS THEIR PERFECT MORTGAGE DEAL

Mortgage to buy land

When searching for a new home or investment opportunity, you may come across a great deal on available land for sale. If you are wanting to buy a plot of land rather than a ready built property you may wonder “can I get a mortgage to buy land?”.

It is becoming increasingly popular for people to apply for mortgages for land rather than buildings. Buying land rather than a ready built property gives buyers flexibility and freedom to use the land as they see fit, whether for a home, agricultural purposes or commercial investment.

Our team of expert advisors have over 20 years of expertise in finding buyers the best available mortgages to buy land. We can advise you on which lenders currently specialise in this type of mortgage, with the potential to save thousands of £s with the right advice.

In this section (mortgage to buy land):

It is possible to get a mortgage to buy land rather than for purchasing property. It can be harder to find this type of mortgage though, so it is a good idea to speak to a specialist broker with experience in this area.

Lenders will want to know what you intend to use the land for and will have specific lending and affordability criteria you need to meet as with any other mortgage. Mortgage providers will look at factors such as:

  • Your occupation
  • Income vs expenses
  • Credit history
  • Deposit amount (loan to value)
  • The type of land, its location and what you intend to use it for

Getting a mortgage to buy land

When applying for a mortgage to buy land you will need proof of what you are planning to use the land for, as well as evidence of your income and planning permission if you intend to build.

You will likely need a higher deposit than with standard residential mortgages. The exact amount you need will vary though depending on the specific lender. Each one will have slightly different criteria for lending, but some could require anywhere between 20%-50% of the land value.

Interest rates can also be higher with these mortgages, so it is worth thinking about the types of interest rate available for mortgages and which is the best fit for your needs. The interest rate types available are:

  • Fixed rate: the interest element of your repayments stays the same for a fixed amount of time (most often 2, 5 or 10 years)
  • Variable rate: the interest you pay will change if your lenders standard variable rate (SVR) increases or decreases
  • Tracker rate: the interest you pay will track the Bank of England (BoE) base rate and will change accordingly
  • Discount rate: lenders may offer a % discount on their variable rate for set time period

Types of mortgages to buy land

There are several reasons you could have for land purchases and there are specific mortgages and lenders that will work best for each situation.

  • Self build mortgages: a mortgage designed for when you want to buy land so you can build your own home.
  • Commercial mortgages: this is designed for investors who intend on using the land for commercial developments (building properties to rent out or sell).
  • Agricultural mortgage: for buying land to grow crops or expand a working farm.
  • Woodland mortgages: for buying an area of woodland, or business purposes e.g. setting up a campsite for example

Certain lenders may offer land mortgages but only one type (e.g. agricultural mortgages but not self build). It is wise to consult an experienced broker, who will know which lenders are best to approach for each mortgage type.

Can I get a mortgage to buy land and build?

If you intend to build a property on the land you are buying, this is known as a self build mortgage.

This can allow you to design your home from the ground up, so you can have complete control over every fixture and fitting.

It can also in theory be more cost effective to buy your home this way. If you budget carefully and choose the right suppliers for building materials etc. you might be able to save compared to how much you would pay for an existing property that could need renovations.

It can be hard to get a mortgage approved to buy land without planning permission, so it can be a good idea to have this in place before applying.

Can I get a bridging loan to buy land?

If you have seen a piece of land on sale at a bargain price but don’t have time to get a mortgage in place, you may be able to use a bridging loan for the purchase.

Bridging loans for land can be extremely useful if you need funds quickly, for example if you were buying at auction.

Bridging finance for land may not be as easy to find, so a specialist broker will be best placed to advise you on which lenders will supply these at a reasonable rate. Lenders will likely want evidence of how you plan to get out of the bridging loan (exit strategy).

Get expert advice from a land mortgage broker

As mortgages to buy land are less widely available, getting the right advice can be key to avoiding an overly difficult and long process.

Our specialist advisors know everything about mortgages to buy land including all potential issues and pitfalls, as well as ways in which you can save.

We will offer you full support and guidance throughout your application, helping you to prevent any costly mistakes.

Useful resources

Gov.uk – HM Land Registry

Gov.uk – Registering land or property

Arbtech – A guide to finding and buying land for sale

Essential Mortgages is a leading mortgage expert

MORTGAGE DEALS
or
SPEAK TO AN EXPERT