North ·  0800 781 1822 South ·  0800 781 0639

How to fund building an agricultural dwelling

Many farms are looking to build new homes on their land for succession planning to allow parents or children to live on-site, for separation or divorce, or for other reasons.

Funding such a build, particularly as the new dwelling will usually have an agricultural tie, comes with challenges that many see as unsurmountable - but they needn’t be if approached correctly.

When you approach a lender for finance for a new build, the key questions the lender will ask are:

  • is it a regulated or non-regulated mortgage - put simply, is it a personal or business mortgage?
  • who will own the property i.e. whose name is on the mortgage?
  • how will the mortgage be repaid?

How you have planned the build, the legal aspects and the finance can often mean success or failure of a funding request. 

You must get professional advice from the start - particularly from your accountant, solicitor and a specialist mortgage consultant who knows the agricultural lending market and what banks are looking for in building projects.

Banks or lenders will want to see:

  • a clear, logical proposal with detailed, accurate information
  • sensible budgets to build, complete and furnish the property
  • evidence the builder has the necessary skills
  • insurance during the build
  • proof of affordability - a mix of on-farm and off-farm income is fine but realism and evidence is essential
  • when you want the funds - perhaps drawn down in stages to match key stages of the build
  • a contingency plan if something goes wrong including the saleability of the dwelling.

Building a house is a large investment. Professional support from the outset is crucial to ensure funding is obtained - and that the funding is cost-effective and enough to finish the build. It’s often too late to ask for advice after the build starts.

To find out how we can help you get a mortgage on good rates and terms for building a house or dwelling on your farm, please give us a call or email us.

North: 0800 781 1822  South: 0800 781 0639