Derelict house funding?

KrisPurnell

Hi all
As you can see I'm new here, just looking for some info.
Theres a derelict farmhouse that's coming up for sale I believe, it's owned by the council at present whom I have spoken to and they have informed me it's being prepared for sale i.e. paperwork etc not property.
The home is all boarded up usual story, now theres two options.
1.home and 10acres surrounding (none in floodplain)
2.home and 50acres (40 of which in floodplain)

I need to know how to go about raising funds to purchase the property, (self build, mortgage retention etc)

Any info would be much appreciated.

Just as a background info, I'm self employed multiple business one of which is highly dependent on cash flow unfortunately.

Jimbo1976

One important question will be "are there any restrictions on the property?" I would imagine that as its a farm there will be some kind of agricultural restrictions meaning that any owner will have to carry out some form of farming activity. These tend to vary, some can be satisfied very simply by keeping chickens or ducks but others may state you need to operate the farm as a farm. The tougher the restrictions the harder it is to get a mortgage.

Other questions include "is the property inhabitable?" ie does it have a kitchen etc. If there isn't a kitchen then you won't get a mortgage.

What is the value of the property vs the land value? Assuming the property is habitable and that there aren't horrendous agricultural restrictions then it may be possible to get a residential mortgage if the main value is the house rather than the land value.

You need to find out a lot more about what is being sold first, but I would speak to a broker or a lender (NFU?) who specialises in mortgages for farms.

KrisPurnell

Hi,

No agricultural tie on the property so not an issue, the working kitchen situation however may be, is there a possibility of mortgage with retention? Or bridging loan until mortgageable maybe?
Apologies just looking for advice, the home is for my young family and I've sort of set my heart on it, the fact it's right next to a golf course has nothing to do with it honest

Jimbo1976

Good news about no agricultural restrictions that means most doors are still open. The lack of working kitchen will cause short term proplems but as you suggest you should be able to get a bridging loan to purchase the property.

Do you want to post the value, size of your deposit and your income details so the wise mortgage brokers who post here can work their magic.

A house in 10 acres. Hope you've got a ride on mower!

I believe you that the golf course has played no part in your hope to buy this house! am not sure your wife will though!

kingstreet

Your best bet is BuildStore or BuildLoan. The latter if you already have a broker in mind;-

http://www.buildstore.co.uk/finance/renovation-conversion-mortgages-how-they-work.html

KrisPurnell

Hi both,

Thanks for responding, jimbo the property price is still up in the air but i would imagine anything from £250k-£350k, deposit can be up to £90k a touch larger if needed and Income is self employed with multiple businesses doing £20k £18k and £120k, the latter being a new business.
Any ideas? Still nervous of the bridging loan route but if it's an option it has to be looked at, as with a spend of £150-£200k the house would be worth around the £8-900k mark.
Thanks again for the advice, the more the merrier

redstiletto

Well I think you would want a stage released mortgage where the whole sum is released but by bit as you do the work, i.e. first lump to get walls up, next to get watertight, then first fix, then final lump to get you compete. This is what people use to build a house or barn conversion. Have you thought about whether it will be cheaper to knock it down and rebuild and if so, whether you would get planning to do so?

KrisPurnell

Hi thanks for the reply, we would have a huge issue getting planning to rebuild, it's more a case of make good what's there but at a glance I'd say it would be completely renovate, roof and all.
It shows on the enviro agency that the house is in a significant risk flood area or at least just on the edge of it, not sure if it makes a difference to mortgage etc providing insurance is arranged.
After speaking to my financial adviser he suggested bridging loan until the house is mortgageable? Any ideas welcome

GMS

KrisPurnell wrote: »

Hi thanks for the reply, we would have a huge issue getting planning to rebuild, it's more a case of make good what's there but at a glance I'd say it would be completely renovate, roof and all.
It shows on the enviro agency that the house is in a significant risk flood area or at least just on the edge of it, not sure if it makes a difference to mortgage etc providing insurance is arranged.
After speaking to my financial adviser he suggested bridging loan until the house is mortgageable? Any ideas welcome

Before entering into any bridging arrangement make sure the property will be suitable for mortgage purposes once completed, specifically flooding and farming ties (however minor)

Entering into bridging with no exit would be suicidal

olias

Hi all,

do any of the mortgage advisors/brokers posting know if buildstore are actively arranging lending at the moment. I looked into them for a project a couple of years ago, but due to the market at that time, they were not confident of lending being available/easy. Anyone know if this situation is much different in the current market, particularly when developing for profit?

(sorry for hijacking thread|...)

Olias

KrisPurnell

Hi
Regarding the mortgageable before arranging bridging will definitely do that, ive got a few things to check over actually a lot of things before it gets to that stage anyway, thanks for the advice though always appreciated.q
Any idea on rough figures of interest,deposit and monthly payments on a bridge of £350k for example?