Agricultural Occupancy Condition - mortgages?

fabh17

We have found the perfect house - we fit the criteria for the agricultural occupancy tie, we will have 50% of the money for it so need a mortgage to fund the other half - approx £200,000. I have been reading that it is quite difficult to get a mortgage for these types of properties plus we are self employed to boot! Would this be less of an issue if the house is worth 400,000 and we put down 200,000 as a deposit? Thanks!!

AdrianC

Mortgage lenders may be wary because the property could prove hard to sell on if they need to repossess. The lower the loan to value, the lower the risk to them. If you've looking for a 50% LTV mortgage, that's fairly safe.

Whether you have sufficient paperwork to support a sufficient income for a £200k mortgage is, of course, something that they'll be looking at.

fabh17

Thank you - yes i think we are okay as been pre-approved for a mortgage up to £300k with our incomes combined but that was for a standard mortgage!
We where just concerned with being self employed and it having an ag tie that we may struggle for a lender. Would this need to be a specialist lender then do you think?

Davesnave

This is not a high street lender's specialism, so you will need to speak with a broker who has experience in this area. There are mortgages available, but at what rates I can't say, although they'll be higher than average.

The large deposit may help substantially and being self-employed should not be a problem, provided you have accounts for 3 years which show a sound business. After all, farmers who borrow to invest are usually self-employed.

Like many others, I bought my ag-tied place outright, so I didn't have to prove that I was eligible to buy.

You say that you meet the criteria to meet the conditions of the tie, but are you sure? I think you'll have to provide certainty here if someone is going to lend you money. A word with the relevant council officer would therefore be wise.

fabh17

Yes 100% meet the criteria, my OH is a forrester - we own the woodlands which is approx 5 mile from the house and this is his main income and occupation.