mortgage to buy land?

DGB1

We have seen and would love to buy a plot of land with planning permission and a mobile home on it - currently we can lend 160k on a mortgage, however - the land, mobile home and costs to build the proposed house would cost 200k. (worth 250k when built) The plot is for sale for 130k. Is it possible at all to buy the plot (we have 15k deposit) without a house or business to secure it against?
Any advice / experience would be very much appreciated.

Paul_the_Painter

You may be able to buy the plot for £130k with a £15k deposit, but I'm unsure how you would actually finance the cost of the build.

Bearing in mind that on a self-build you would want a fair amount of cash to hand (you've actually got to pay up front for somethings - like labour!) I would be uncomfortable dropping below about £10k cash on hand.

You can release more funds as you reach stages on the build - foundations - shell - first fix etc..

But I don't think you have enough cash to finance the intermediate stages, unless you have the ability to borrow 10-30k to get you to the next financing hurdle.

tyllwyd

I think what you need is a self-build mortgage
http://www.buildstore.co.uk/finance/hsbmwork.html

But to be honest, just on those figures you've given personally I think you would be mad to go into a project like that without more money to fall back on. What happens if the build costs are more than you anticipate, and you end up with a half-built house that isn't suitable for an ordinary residential mortgage (I think you need a working kitchen and bathroom for that) but no funds to continue?

SouthCoast

This one appears to have run out of money:

http://www.rightmove.co.uk/property-for-sale/property-16412340.html

martindow

SouthCoast wrote: »

This one appears to have run out of money:

http://www.rightmove.co.uk/property-for-sale/property-16412340.html

They only seem to have got as far as the footings. Isn't this done sometimes to stop PP expiring which would happen if no building is done within a certain time frame?

Paul_the_Painter

Used to be 5 years to start work - now can be set at 3 years to encourage speedy development, PP granted in 2007, cue JCB and a readymix concrete truck.