Loan to Purchase Land

ajbrunel

Good morning to you

I am trying to get a Loan to buy 6 acres of land here in Devon asking price £50k (for own use growing Soft Fruit, planting an Orchard and keeping a few Sheep), I am not a home owner but I do have a 50% deposit.

Now the frustration; I could go out and buy a new car for £75k with this deposit which would be worth much less as soon as I drove it away; however all I am getting is show me a business plan as to how this is going to pay for the loan (over 5 years). Well I am not looking at this as a business venture and the land will still be worth more than I am asking to borrow. Please can anyone advise as to how I might get a loan?

Kind regards



Alex

ILW

I would spend the money on buying yourself a house.

antrobus

ajbrunel wrote: »

I could go out and buy a new car for £75k with this deposit which would be worth much less as soon as I drove it away;

Well perhaps you could. But the lender might well look at it from the point of view that if it has £50k at risk, then they can still repo teh car and stand a good chance of getting their £50k back.

ajbrunel wrote: »

I am trying to get a Loan to buy 6 acres of land here in Devon asking price £50k (for own use growing Soft Fruit, planting an Orchard and keeping a few Sheep) ... I am not looking at this as a business venture and the land will still be worth more than I am asking to borrow.

You might think the land is worth £50k, but the lender will be thinking what can we get for it if we have to repo? It's six acres of agricultural land, so ultimately what it can be sold for may well be determined by what you can earn farming it. If you can't produce a business plan to show that it's possible to earn something from the land in question, the lender may well fear that it isn't worth anything at all.

Aside from the fact that, at the very least, producing a business plan will at least show a lender that your use of the land isn't going to cost you anything. Otherwise how do they know it isn't going to be a money pit that just swallows up all your money and drives you into bankruptcy?

ajbrunel

Hello Antrobus

Thank you for your reply, £50k is the current market value and at the moment land is going up in price. The other thing is that I would be putting down £25k so their risk is £25k on land worth £50k. I work as an IT & Project Management professional and have done so for over 25 years and would continue to do so.

Thank you


Alex

chalkie99

On that basis perhaps you could apply for an unsecured personal loan.

Have you calculated how much you can afford in repayments?

Example quote from M&S

£408.30 per month over 7 years

if you have an impeccable credit record might be worth a punt.

antrobus

ajbrunel wrote: »

Hello Antrobus

Thank you for your reply, £50k is the current market value and at the moment land is going up in price. The other thing is that I would be putting down £25k so their risk is £25k on land worth £50k. I work as an IT & Project Management professional and have done so for over 25 years and would continue to do so.

Thank you


Alex

All those things might be true. On the other hand it is also possible that the value of agricultural land is about to tank, and that you might be about to become unemployable for some unforseeable reason.

Putting together a business plan that shows what you're going to be doing with the land, the income and expenses incurred etc, isn't going to hurt, and will allow you to cross that threshold and actually get a lender to look at the proposition.

Incidentally you might also have to think about the tax consequences of your plan. You might not think of it as a business venture, but HMRC might beg to differ if you were actually making a profit.

CH27

ajbrunel wrote: »

Good morning to you

I am trying to get a Loan to buy 6 acres of land here in Devon asking price £50k (for own use growing Soft Fruit, planting an Orchard and keeping a few Sheep), I am not a home owner but I do have a 50% deposit.

Now the frustration; I could go out and buy a new car for £75k with this deposit which would be worth much less as soon as I drove it away; however all I am getting is show me a business plan as to how this is going to pay for the loan (over 5 years). Well I am not looking at this as a business venture and the land will still be worth more than I am asking to borrow. Please can anyone advise as to how I might get a loan?

Kind regards



Alex

Have you submitted a Business Plan?

ajbrunel

Hello CH27

I have not submitted a Business plan, I want to buy the land for my personal use.

Kind regards



Alex

COOLTRIKERCHICK

I honestly dont think Agri land is going to tank, if you read all the farming reports etc.... land is now a primium price due to the world demand for food etc...

I am in the same position as you, there was 20 acres of rough passture land for slae locally for 70k i could only afford 50k and offered this with a defered payment of the 20k, but no luck... I didnt want to get a loan etc as i was basically leaving myself very vunrable with teh 50k offer...

Could you offer the full asking price with a down payment of your 25k, and a monthly payment there after until the balance is paid or edefered payment of the remaining bal of 25k for 1 year? and maybe selling every posession you own raise money or go for a personal loan?

another option could be this, but please this would only be a short term fix, and dont forget you would have to pay it back before the introductary offer ended etc..


M&S are offering 15 interest free on spending........ the travellers cheque from m&s are classed as spends so you will not accur money interest charge on them... the only charge is the 1% of the travellers cheque value...
http://money.marksandspencer.com/cards/credit-card/overview/

the limit on the card ranges from 3 - 4.5k I know its not all the money, but it could be an option for you to raise some cash, but PLEASE...PLEASE... remember your monthly repayments will be approx £100 per month min, and you will need to pay it off in fully by the end of the offer, otherwise you will be charged the interest.

Basically this way you will be getting a short term loan for 1% interest.

here we go here is the link to the mse thread

https://forums.moneysavingexpert.com/discussion/3198884

antrobus

COOLTRIKERCHICK wrote: »

I honestly dont think Agri land is going to tank, if you read all the farming reports etc.... land is now a primium price due to the world demand for food etc...

Well I don't think that the value of agricultural land is going to tank either. That's not the point. The point is that the value of agricultural land can tank, it's done it before, and it will do it again. I was simply giving an example of the kind of thing that could go wrong. There were plenty of people around in early 2007 saying that they honestly thought that house prices weren't going to fall. And look what happened.

ajbrunel

COOLTRIKERCHICK wrote: »

I honestly dont think Agri land is going to tank, if you read all the farming reports etc.... land is now a primium price due to the world demand for food etc...

I am in the same position as you, there was 20 acres of rough passture land for slae locally for 70k i could only afford 50k and offered this with a defered payment of the 20k, but no luck... I didnt want to get a loan etc as i was basically leaving myself very vunrable with teh 50k offer...

Could you offer the full asking price with a down payment of your 25k, and a monthly payment there after until the balance is paid or edefered payment of the remaining bal of 25k for 1 year? and maybe selling every posession you own raise money or go for a personal loan?

another option could be this, but please this would only be a short term fix, and dont forget you would have to pay it back before the introductary offer ended etc..


M&S are offering 15 interest free on spending........ the travellers cheque from m&s are classed as spends so you will not accur money interest charge on them... the only charge is the 1% of the travellers cheque value...

the limit on the card ranges from 3 - 4.5k I know its not all the money, but it could be an option for you to raise some cash, but PLEASE...PLEASE... remember your monthly repayments will be approx £100 per month min, and you will need to pay it off in fully by the end of the offer, otherwise you will be charged the interest.

Basically this way you will be getting a short term loan for 1% interest.

here we go here is the link to the mse thread

Thank you COOLTRIKERCHICK

I have asked the seller if they would take a £25k deposit and the remainder over 5 years +interest of course, but the Agency said the vendor said no thanks. I also do not think Land is about to tank, being careful is one thing.

Kind regards



Alex