Mortgages for homes with land

A mortgage for a property with land is a residential mortgage on a home that comes with more land than a usual garden, such as paddocks, woodland or a smallholding. Standard lenders will usually lend on the house and a modest amount of land, often up to a few acres, while larger plots need specialist lenders.

The main residence must be the focus of the purchase for a residential mortgage to fit. Where the land is the main part of the value, or it is farmed as a business, agricultural or commercial lending usually applies instead.

Lenders value homes with land by looking at the house and the land together, and many split the value between the two. Some only lend on the house plus a limited acreage, so the land above that limit has to be funded from the deposit. Rural surveyors are often used, so valuations take longer.

Outbuildings, equestrian facilities, private water or drainage and rights of way can all affect the valuation and the lender's view. Agricultural occupancy conditions, which restrict who can live in some rural homes, narrow the choice of lenders further.

Farmhouse mortgages and manor house finance cover larger rural homes, often with land, outbuildings or listed status. Where the home is lived in and any land is used privately, specialist residential lenders, private banks and some building societies will consider them. Where the land is farmed or let, agricultural mortgage lenders usually fund the purchase instead.

Listed buildings and period homes can need specialist surveys and insurance, and lenders check that the condition and running costs are realistic for the borrower. How agricultural and land-only lending works is explained in the land mortgages section.

Lenders check the borrower's income, outgoings, credit and deposit, as on any residential mortgage, then look closely at the land: its size, use, access, planning status and any income it produces. Income from letting grazing or running a small business on the land may be considered by some lenders but not others,.

Most lenders want to see land income in accounts or tax returns before they count it, and planning restrictions or environmental designations can limit how the land is used. A larger deposit is often needed where the land adds a lot to the price. A broker who arranges rural cases will know which lenders accept a given acreage and use, and residential specialists can be compared on the residential mortgage brokers page.