Scenario:
A client was purchasing a residential property that came with a total of 16 acres. The main house and garden were situated on 2 acres, while an additional 14 acres of surrounding land – including an outbuilding – were being sold as part of the same transaction.
Challenges:
Most high street lenders are unwilling to lend on properties with more than 10 acres, due to concerns around agricultural or mixed-use classification. In this case, the inclusion of 16 acres posed a significant hurdle. Additionally, the presence of an outbuilding raised further concerns, as lenders often view these as potential for commercial use or letting, which can complicate the transaction and affect eligibility for residential mortgage terms.
Solution:
We sourced a lender that was comfortable taking just the 2-acre portion – which included the house and garden – as security. This area was already registered under a single title, making the separation straightforward from a legal and lending perspective. An agreement was reached with the seller for the client to purchase the remaining 14 acres, including the outbuilding, using personal funds. This portion was handled as a separate cash transaction, outside the scope of the mortgage. This structure allowed the mortgage to proceed on standard residential terms, while still enabling the client to acquire the entire 16-acre estate as planned.
Key figures:
Property value: £1.6 million
Loan amount: £1.36 million
LTV: 85%
Repayment type: Part interest only
Product type: 5 year fixed
Interest rate: 4.39%