Mortgage for self build with no-site and no planning

Gotfoodforphil

Hi,

Have recently started looking into mortgages for self-builds, and the impression the banks and a broker have given me is that 90 % of self-builds are done on inherited family land.
The broker outlined the challenge in getting a self-build approval without a site, basically;

1. Find a site
2. Get planning permission without purchasing the site (?)
3. Obtain builders/architects costs for the build
4. Assuming all approved, make offer to buy the site

This seems pretty unlikely to me that someone would be able to get all the ducks lined up to do this.

Has anyone had experience of doing a self-build in this way? How did you manage to get planning permission prior to buying a site?

sydthebeat

Gotfoodforphil wrote: »

Hi,

Have recently started looking into mortgages for self-builds, and the impression the banks and a broker have given me is that 90 % of self-builds are done on inherited family land.
The broker outlined the challenge in getting a self-build approval without a site, basically;

1. Find a site
2. Get planning permission without purchasing the site (?)
3. Obtain builders/architects costs for the build
4. Assuming all approved, make offer to buy the site

This seems pretty unlikely to me that someone would be able to get all the ducks lined up to do this.

Has anyone had experience of doing a self-build in this way? How did you manage to get planning permission prior to buying a site?

people purchase the site on condition that they get permission. its called purchasing "subject to planning permission"

your schedule of how things happen isnt correct
this is more often what happens

1. find a site where your likely to be granted permission on
2. agree a price with landowner and make arrangement to purchase "subject to planning"
3. get mortgage "approval in principle" so you know how much you can spend on the build (including the site costs)
4. design house to suit budget, and go through planning process to hopefully a successful end
5. after planning, tender the work out and see how much it will cost
6. apply for mortgage approval with all costs identified
7. pay for site as originally agreed

Gotfoodforphil

Ok, so you would agree with a landowner that the site would only be purchased once the planning permission was granted?

A follow up on this; is it normal to do this with sites already advertised for sale e.g. on Daft? Or do people occasionally approach land owners directly?

Any idea of a normal timeframe for this kind of process as you've outlined i.e. say to landowner that you'll buy the site subject to planning, X months pass while planning is agreed and architect/builder costs are estimated, then you buy once the mortgage is approved by the bank? What I'm getting at here is that the timeframe seems potentially prohibitive for the landowner to want to be bothered with the potential purchaser, why would they wait?

sydthebeat

Gotfoodforphil wrote: »

Ok, so you would agree with a landowner that the site would only be purchased once the planning permission was granted?

A follow up on this; is it normal to do this with sites already advertised for sale e.g. on Daft? Or do people occasionally approach land owners directly?

not all sites are equal, and not applicants are equal

you need to figure out if the site you are looking at is in a "local needs" area... and if so you need to determine if you meet these "local needs" requirements

Gotfoodforphil wrote: »

Any idea of a normal timeframe for this kind of process as you've outlined i.e. say to landowner that you'll buy the site subject to planning, X months pass while planning is agreed and architect/builder costs are estimated, then you buy once the mortgage is approved by the bank?

there really is no "normal" timeframe. The absolutely quickest you can have permission is 3 months, but quite often that extends to 5-6 months plus.

then you have to consider design lead in time, tender process and mortgage approval time period

any landowner agreeing this situation should be happy with any deal thats completed within 12 months.

Gotfoodforphil wrote: »

What I'm getting at here is that the timeframe seems potentially prohibitive for the landowner to want to be bothered with the potential purchaser, why would they wait?

because if they want to maximise the value of the land as a potential "site" then they need to wait until it actually becomes a "site" ie at the end of a planning application. otherwise its just a part of an agricultural field, and has much less value (ie an acre agri field would be valued about €9000)

also, if the site is subject to "local needs" then the landowner cannot (1) simply sell to anyone and (2) apply for himself and sell the site with permission

and also again, any site being bought with a mortgage will be required to have planning on it first.... so anyone with a mortgage cannot simply buy a site with mortgage money and risk refusal of the permission, and being left with a useless overpriced parcel of land.

Gotfoodforphil

Thanks for the detail in your answers!

You've summed it up in the last point, there is no bank that will approve a mortgage without the site planning and building costs approved.