The Accidental Smallholder Forum
Community => Coffee Lounge => Topic started by: janeymx on April 24, 2010, 09:11:22 pm
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Hi there
We are in the process of trying to buy a property that has 13.5 acres. We have just heard that our mortgage lender won't loan as the property is registered as a smallholding (has a CPH number). In reality, it won't have this at the time of completion as the vendor is keeping a field and the number will apply to that field - we would have to apply for a new number.
However, the mortgage lender has advised that they believe we would use the land for commercial livestock and that there is no way of 'policing' us to see if we have got animals etc..... We were going for a residential mortgage in West Wales. Has anyone had this problem? Does everyone have commercial mortgages? Is there a lender that talks more sense than ours.........?!
We have had another lender offer to lend - on the proviso that we write a letter saying we would deregister the land.......
Thoughts appreciated!
Thanks very much
Jane & Steven
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Thats weird! I have never heard of that before. I don't think many people on here have a commercial mortgages. We certainly don't, though we only have a just an acre under of field.
Beth
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I've never heard of this either ???
Are you buying with the intention of farming or trying to make a living from farming ? Perhaps the bank are worried that you'll default on payments if you're not making a profit - though I wouldn't imagine it's any different a situation to someone buying a house then perhaps losing their job. I know mortgage companies are tightening up on lending but this sounds ridiculous. Surely if you can afford to pay the mortgage it's up to you what you do with the land ? I'd try talking to a few other lenders and see what they say. Sorry I can't be of more help.
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Hi,
Not intending to make a living from farming - we thought we may like to get some sheep / pigs somewhere down the line - but would be a while as the house needs some work first that we would do first. We are new to keeping livestock - so it would only be as a hobby rather than to pay the mortgage.... We both have jobs currently and the loan is based on the income from those.
It is weird as the same lender offered to lend to us on a previous property which also had a CPH number (in the same loan period.....).
Is also really frustrating as we were ready to move and now starting again with the lenders..... :-\ We had been going to port our mortgage - but now need to wait for a few months to avoid paying an early redemption charge from our current lender - so are hoping it doesn't break the chain down.... argh.
Thanks for your input. One broker had said that lenders were wary of lending to 'smallholders' - and thought this was a good place to find out if this was true.....
Jane & Steven
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We had a mortgage of £30K on an £80K property, farmhouse needing renovation, and 22 acres - no problems at all - Clydesdale/Yorkshire Bank
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If you are moving to west wales get in touch with John Francis the estate agents, they work in conjunction with a mortage company (think its called west wales mortgages (or something similar) ;)
Where in west wales are you going, thats where we are, i love it :)
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WWe hit this problem too. We had a very good mortgage advisor, who advised us to say we had no intention of farming the land, and say we were just living in the house. Otherwise, we would have had to put in a business plan, showing what we were going to do, what income we expected, what animals.......I assume the mortgage offer would be based on this plan. I thought it would look a bit odd that we had 14 acres and not going to use it, but we did as we were told by the mortgage man. He said it would be causing us a big headache otherwise.
We were actually only borrowing less than twenty per cent, but it would still have affected us. We were with a big mortgage lender.
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Thanks. We are hoping to head over to Ceredigion area.
Good idea about West Wales mortgage - will look into that, also thanks for the Clydesdale / Yorkshire tip. Ours is a big mortgage lender too - we have said that we won't have a CPH number at the time of completion and therefore can't legally keep livestock...but they aren't budging so far..... Will persevere with some others. Our solicitor has taken it up with the current lender - but we did have a letter from them the other day saying it was their FINAL response at the FINAL point of appeal..... which I think was another way of telling us NO, GO AWAY..... ;)
Anyway, thanks all..... appreciate the advice. Where is West Wales are you HellyBee?
J & S
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Above poppit sands on the Pembrokeshire Coastal Path, near (ish) to St Dogs, northern most point of Pembs, we look over the estuary to Ceredigion :) :wave:
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We'll give you a wave if we ever get there!! :wave:
Will start again with the banks on Monday with a bit more optimism!! Thanks all.
J&S
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Good luck with your application!!!
Just because you won't have a Holding number at the time you take out the mortgage, does not mean you will not get one afterwards, and the lender will know this. I never realised there would be a problem until we tried to do it, and I cannot see why they kick a fuss up about smallholdings. People must get mortgages to buy smallholdings ....do everyone say they will not be farming? Wonder if you said you were keeping horses ( I do have some) they are not agricultural animals, so would that make a difference?
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We had a CPH but they never even asked what we were going to do with the land, except maybe in jest - and we i think said grow sheep. ;) But we were both inm full time employment at the time, maybe that made a difference, our salaries were verification that we could pay the mortgage I guess.
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Hi I never heard of this either, when we bought our place 11 yrs ago, there was 6 acres but no holding number. The building society would not lend on the value of the land, just the property and garden, in effect our mortgage was on the bungalow and an acre, the rest we paid for within our deposit. We have since changed lenders twice in that time and its never come up with them. Good luck.
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Oh yes do not say its for any animal other than horses for your own recreation or its a big garden cos if you mention sheep ect you are into the realms of a commercial mortgages and that can take you months to get, as it did us.
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I'm puzzled by the problem - when I wanted to buy more land, I just went to the bank & asked for a loan - I was completely open that I wanted to raise sheep, but the repayments would be met by my existing NHS job.
The financial adviser was quite interested in hearing about my dreams, and happily approved the loan. No problems at all.
John
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Most people who have had no problem with this have applied for their mortgages several years ago. 3 to 4 years ago banks were throwing money at people but not now after this credit crunch.
Times change and so do mortgage criteria, we have just gone through this and it took nearly 8 months to convince a bank about a commercial mortgage so go domestic if you possible can..
We offered a price, it was accepted on 1st September, we pick up the keys on Monday. We had a down payment in cash of £100,000.00 and needed £150k mortgage and it took us trying 5 banks before we got a bank to believe in us. The bank said they would lend us £100k as a mortgage and £50k as a bridging loan so we have to sell one of our houses to pay the loan. By their own valuation as soon as we move in and paint the place it will be worth £100k more.
Thats how hard it is now.