In our latest case study, we present the challenges and outcome of financing the purchase of a 109-acre farm. Agricultural mortgage lenders can be pickier than you think…
Fox Davidson were approached by a client who had his own successful IT business. He was looking to purchase a farm for his family as he wanted his children to grow up in the countryside. The property had 109 acres, solar panels, an annex used by the current owners as a butcher’s food preparation building with planning permission for conversion to a two-bedroom residential dwelling.
The butchers building consisted of a main butcher room, walk-in chiller, an office, a shower room and a store room or office on the first floor. There was also a mixture of traditional and modern outbuildings on the freehold. Due to these considerations, the buyer would require an agricultural mortgage.
Difficulties arose due to the client needing to borrow 70% of the purchase price. Both High Street and specialist lenders were unwilling to help as the current owners ran their business from the site and lenders were uncomfortable with the size of the acreage.
Fox Davidson found a bank who were willing to help as long as there was 3 years proof of separate income away from the property and confirmation of how the clients amassed their wealth. A further condition of the offer was that any development would not be permitted without the bank’s consent. This suited the clients as they were not looking to develop the property within the next few years.
Fox Davidson were able to secure a variable rate of 3.49% for the term of the mortgage. We liaised closely with the lender throughout the application process to explain each part of the purchase. As the client did not want to use the property commercially, we were able to find a competitive residential lender who was happy for the client to lease the acreage out as pasture land and reside in the farm. The client is over the moon and now able to move into his family’s dream property, all thanks to choosing the right mortgage broker. Bristol-based offices and many years of experience means we understand the demands of both city and rural mortgages.
To explore which agricultural mortgage lenders would be best suited to the purchase of your dream property, contact us today.