[HesterF]

We bought a house with 6.5 acres two years ago, and the main thing we did'nt realise, is you can't have a regular mortgage with land over two acres,
that is a new one to me... I've not been told that by Santander during my "mortgage interview" with them so I hope they don't suddenly introduce it later and scupper my deal!   


perhaps that was just related to buying the place and running it as a commercial business?

We've got a regular mortgage and over 8 acres of land - I think because we just bought a good sized house which happens to have a really large garden effectively. The only thing that came up was that the mortgage company wanted a statement saying we wouldn't use it for commercial or agricultural purposes. I queried that since 8 acres is, almost by definition, agricultural. Our solicitor advised us to juggle the wording slightly so we sent a statement saying we wouldn't use it for 'commercial or commercial agricultural purposes' to see if that was fine, and nobody queried it. So we can grow things/breed things for our own consumption but in theory shouldn't be running a business from here. She reckoned, off the record, that a few egg sales from the gate would be fine. The holiday cottage, on the other hand, we will have to declare but since we're a good year off any income from that, I currently have my head buried deep in the sand.

[spandit]

That's a bit worrying as we're trying to do the same and have been thinking of ways we could earn a bit from the land. Won't need any extra income to afford the mortgage but can't just let the paddocks go to waste

[scarlettoara]

We bought a house with 6.5 acres two years ago, and the main thing we did'nt realise, is you can't have a regular mortgage with land over two acres,
that is a new one to me... I've not been told that by Santander during my "mortgage interview" with them so I hope they don't suddenly introduce it later and scupper my deal!   


perhaps that was just related to buying the place and running it as a commercial business?

We've got a regular mortgage and over 8 acres of land - I think because we just bought a good sized house which happens to have a really large garden effectively. The only thing that came up was that the mortgage company wanted a statement saying we wouldn't use it for commercial or agricultural purposes. I queried that since 8 acres is, almost by definition, agricultural. Our solicitor advised us to juggle the wording slightly so we sent a statement saying we wouldn't use it for 'commercial or commercial agricultural purposes' to see if that was fine, and nobody queried it. So we can grow things/breed things for our own consumption but in theory shouldn't be running a business from here. She reckoned, off the record, that a few egg sales from the gate would be fine. The holiday cottage, on the other hand, we will have to declare but since we're a good year off any income from that, I currently have my head buried deep in the sand.

iv never heard of that before. what is the reasoning behind it? i know some mortgages wont let you rent your house out.
now would running it commercially be the same as making a profit (v hard to acheive in reality). do you think any would ever check up on you, if so in what scenario? a strange thing.

[HesterF]

I'm not sure what the logic was but it was a standard thing for any property with more than x amount of land (thought it was more than two acres but may be only one as mentioned above). At the time I thought it related to our ability to pay back the mortgage I.e. if we began living the dream and then couldn't afford the payments... However I wonder now whether it's because a loan that is financing a business (which is what the mortgage would be if we were buying a commercial property) should have a different structure and terms than a domestic mortgage. Very unlikely they'd ever find out realistically but if they did, we'd have broken the terms of our mortgage and I guess they could just pull the loan and leave us stuck (or change the terms to less favourable ones),

H

[lachlanandmarcus]

We bought a house with 40 acres on a normal mortgage in 2002.....No restrictions on usage. This is in Scotland.

[waddy]

We bought a house with 6.5 acres two years ago, and the main thing we did'nt realise, is you can't have a regular mortgage with land over two acres,
that is a new one to me... I've not been told that by Santander during my "mortgage interview" with them so I hope they don't suddenly introduce it later and scupper my deal!   


perhaps that was just related to buying the place and running it as a commercial business?

We've got a regular mortgage and over 8 acres of land - I think because we just bought a good sized house which happens to have a really large garden effectively. The only thing that came up was that the mortgage company wanted a statement saying we wouldn't use it for commercial or agricultural purposes. I queried that since 8 acres is, almost by definition, agricultural. Our solicitor advised us to juggle the wording slightly so we sent a statement saying we wouldn't use it for 'commercial or commercial agricultural purposes' to see if that was fine, and nobody queried it. So we can grow things/breed things for our own consumption but in theory shouldn't be running a business from here. She reckoned, off the record, that a few egg sales from the gate would be fine. The holiday cottage, on the other hand, we will have to declare but since we're a good year off any income from that, I currently have my head buried deep in the sand.

The place we are buying has nearly 34 acres and we have got a mortgage with Santander/Abbey. As with Hester F we had to say we weren't going to use it commercially although we made it clear as a lifestyle choice we would be having a smallholding and there may be a few veg and eggs ect. sold at the gate. Our mortgage broker said they aren't concerned about that as long as the mortgage gets paid.

[Small Plot Big Ideas]

that is a new one to me... I've not been told that by Santander during my "mortgage interview" with them so I hope they don't suddenly introduce it later and scupper my deal!

Guess what... Santander have now put a spanner in the works and refused our application although we have sent further information to them this morning in the hope of changing their minds.... Fingers crossed that they come back with the right answer later today...

What's more worrying is that last week we also did a quick check with Newcastle Building Society (just in case) and they said this morning that it doesn't meet their lending criteria so that option is out too!

Why is this so difficult? We're borrowing less than 50% of the property value and all searches/surveys are good so I don't understand why there is a problem. We've even declared that we won't be running an agricultural business as some others have mentioned so I'm stumped.

Does anyone have any suggestions for mortgage providers who will lend on a property with agricultural land these days? 

[waddy]

For our application to Abbey/Santander we had to jump through hoops and it took much longer than expected.  We were originally refused but it turned out they had misunderstood something. We also are borrowing less than half the value. As my OH is self employed we had to supply the last few years books; get a reference from our accountant and get a projected figure for this year from them based on accounts so far. They kept coming back with more and more questions; some of them for information we had already supplied. It was so frustrating. We had a mortgage broker which certainly helped the process including smoothing things with the estate agents and vendors as they were also getting frustrated. We are now delayed due to legal obligations on their part (lack of building regs for an extension and a faulty unregistered septic tank); but we are much further forward. Hang in there and keep trying. It will be worth it in the end.


 


Helen

[Small Plot Big Ideas]

It's nice to know we're not alone - your situation sounds so similar to ours it made me smile which is quite an achievement these days!. 

[HesterF]

Ours is with the Nationwide but all negotiated via a broker - seemed fairly straightforward (itch reams of paperwork) at one stage removed,

H