Mortgage On Property With Land?

[Epona]

Hi. We bought a property with 5 acres of land at auction, with the intention of applying for a small Mortgage to renovate the house. We need a very low LTV, only about £30,000 on a property purchased for £275,000. Two Mortgage companies have refused our application due to the property having land with it and one advised separating the Titles from the land and house and then applying for a mortgage just on the house. This seems ridiculous as the house and land together are worth much more than the land and house separate. The house is residential and the land classed as Agricultural . The AMC will not consider a mortgage as we don't have enough land, we are going around in circles at the moment so my question is: Does anyone have a Mortgage on a Smallholding and if so which Company do you use? Thank You.

[bednobs]

hi,, i'm sorry i don't know the answer, but have you tried a broker. Your problem of course is that the land is agricultural,(rather than just a big garden) and it's probably classed as land with a house attatched, rather than house with land attatched. Are you sure that it would be worth less when seperated?

[FredPuli43]

What's 5 acres of land worth? Probably £7,500 an acre here (I'm in East Anglia) as arable, £11,000 as grazing when equipped with water etc, £15,000 with the potential of planning in the next 30 years, £1 million with permission granted.

So it's worth probably £37,500 in all. That means the house is worth about £237,500. And you want to borrow £30,000 against it. Well, split the title into two parcels in your name and get a mortgage on the house.

[FredPuli43]

Is the house under an agricultural restriction ? That is a term that restricts its ownership to a farmer or someone employed in agriculture. It devalues the house, is often difficult to remove,and makes the house difficult to sell. That may be a factor in assessing and refusing a mortgage.

[Epona]

Thank you for all the replies. The house has no agricultural restriction and not registered as a farm. We are going through a broker but he seems to have hit a brick wall, probably time to try a different broker. The easiest course of action would probably be to separate Title, at a cost of around £400 to include solicitors fees. I just wondered if anyone had procured a mortgage on a smallholding and how they did it . Thanks anyway.