Self Build Mortgage Advice Needed

Pugliese

I am looking for some ideas on how to raise self build mortgage finance.

We plan to build a block of 7 x eco town houses and sell them at cost.

We have spent the last year marketing them and whilst we have had loads of interest, most buyers are excluded because they cannot get a mortgage, as all the houses are being built together and the mortgage companies cannot get a charge on an individual plot. Therefore we have only been able to take deposits from 100% cash buyers.

We now have 5 cash buyers but struggling to find the remaining two purchasers. Therefore our minds have turned to try and find a way that a mortgage could be taken on these two plots.

With all the cash purchasers, we have sufficient funds to build to getting the whole property up and watertight (about 70% spend) and considered at that point we could register individual titles for each property.

So are there any mortgage companies that would lend against this out there?

Conrad

Have you looked into a leashold arrangement as this is the usual method when properties share a single deeded plot of land?

Non standard properties not made of brick with a tiled roof, may also be a no no for lenders.

Buildings insurance is a pre - requisite for mortgage lending, so is there a reasonable buildings insurance in place? Insurers again do not like non standard building materials - for example compressed hay, due to all manner of fire and weather risks, and also any new building types can lack the usual history of hundreds of years of demonstrable durability.

Also be aware that some of those cash buyers may subsequently be advised by thier Lawyers that future saleability could be an issue where only cash buyers are the target audience.

What about things like liability? If there is no lease in place, all owners would have to have an agreed approach to things like ongoing maintenance. What if one owner becomes an alcoholic and decides they do not want to contribute to future maintenance / gardening / roof repairs?

Forgive my ignorance, but of course I have no detail on the project so they seem like fair questions to ask.

Pugliese

Thanks Conrad and fair questions to ask.

The build is of standard timber frame with tiled roof construction, albeit super insulated with PV, solar thermal and wind turbine for power. All standard fair for a lender.
Leases will be granted once the title is registered.
So all pretty standard stuff, just need to find a lender interested in lending on a building 70% complete.

here is the website for reference www.ramp101.co.uk

hcb42

can't help on the question, but great project

Pugliese

Quick update, looks like the Ecology BS are willing to talk and even give a large discount due to the energy saving nature of the houses