Country plots: 5 ways to beat buying issues

If all that stands between you and an idyllic rural lifestyle is getting a mortgage on a new property in the country, these expert tips will help smooth over any issues you face.

By Hugh Metcalf | 13 December 2019

If you dream of building or buying a home in the country, there could be hidden ‘red flags’ standing in the way of securing financing. We ask the experts to solve the most common issues.

barrow hous eby ID architecture in lincolnshire wolds - granddesignsmagazine.com

Image: Barrow House by ID Architecture had to meet regulations whereby it was deemed architecturally significant because of its rural location, read more. Photo: Andy Haslam 

Whether you’re looking for that dream country plot or are eyeing up a rural property with scope to renovate, you may assume that, away from the hustle and bustle of city living, securing financing for a home is easier in the countryside.

However, that’s not always the case – and it could all be down to some little well known ‘red flags’ that dissuade mortgage providers from lending on rural homes.

We spoke to independent mortgage broker Private Finance about the most common issues that arise for those seeking lenders on properties in the country and how best to resolve them.

Self building on rural land

hawick self build home photographed by Nigel Rigden - granddesignsmagazine.com

Image: Brian and Lesley Robertson bought a plot in the country that already had planning permission for two small bungalows, read more. Photo by Nigel Rigden, 

Problem: High property and stamp duty costs mean many homeowners are taking a DIY approach by buying a plot of rural land and building their own property on it, but how to get a mortgage when there’s no property to lend against?

Solution: Self-build mortgages are available, however they work differently to regular residential loans. The lender will generally release cash in stages to fund construction and some lenders won’t pay until stages of construction are successfully completed. Others have stringent rules about only using professionals to carry out any work. As self-build mortgages are fairly niche, not all lenders offer them, and they generally require a large deposit.

Large acreage

Problem: Not all lenders have an appetite for properties with a lot of acreage. This is because they are nervous that some of the land might be used for commercial or agricultural purposes, which would automatically disqualify borrowers from taking out a residential mortgage. Generally, most high street lenders will only lend if the property is under 10 acres. Alternatively, they will only value the house and its immediate gardens – meaning the true value of the estate is not reflected and you might not be able to obtain a large enough loan.

Solution: Specialist lenders do exist who will happily lend on smallholdings and country estates with no limit on the amount of land forming the title deeds. These can be hard to find, so it’s best to use an independent mortgage broker who has an existing relationship with these types of lenders.