Finance for property with acreage

Property with acreage can often need a broker with a degree of specialism to step in and help arrange finance.  At Fox Davidson, we are experienced in financing property with a couple of acres right up to functioning farms with hundreds of acres.

In lending terms, property with acreage falls into three main sectors.  Each of which is underwritten differently and each of which we may need to approach in different ways with different types of lender.

Please note, Fox Davidson does not advise on properties with acreage in Scotland.

Up to 2 acres

A residential property can be bought via a highstreet lender if it has a couple of acres.  This generally causes lenders no issue as most lenders will view up to a couple of acres as being an extended garden and include it in their valuation.  If we add outbuildings into the picture this can start to make things slightly more complex for the average high street lender as they will need to determine whether the property is going to be used commercially. 

At Fox Davidson, we can finance property up to ten acres with high street lenders at market leading rates.  We have to be careful which lenders we approach as the majority may only take a couple of acres into consideration when valuing the property.  Therefore if our client is borrowing at a higher loan to value or trying to obtain the lowest rate available at a low loan to value the correct lender needs to be approached first time.  As we are an across the market brokerage and specialize in finance for property with acreage we know which lender to approach first time for any scenario.


Over 10 acres

If a property has acreage of over ten acres this can knock out many of the highstreet lenders as the majority will place a 10 acre maximum on property they will secure finance against.  We at Fox Davidson do however have great relationships with some high street lenders who have no maximum acreage criteria.  This is based on the property being primarily a main residence and not being used commercially.   Also these lenders may not value the whole acreage so whilst it is technically possible to secure a higstreet rate on a property with over ten acres we must be aware of a possible downvaluation if the acreage makes up a high percentage of the overall value of the property.  This is all part of our researching and fact finding and our advisers will advise you accordingly.   Often, if the property has over ten acres we may be looking at quite specialized lenders.   They may still have competitive rates which can be comparable with the highstreet.  The advantage of using a specialized lender is they take the time to really understand the property and it’s use and can often lend on very competitive terms if they feel comfortable with the scenario.

  • High street banks and building societies can lend if the property is relatively straightforward and they can be comfortable in the property being used as a main residence with no commercial use
  • Local Building Societies can often look at higher acreage than the high street and can also lend against property with an agricultural or equestrian tie
  • Private Banks are fine with large acreage and can also look at a mix of residential and commercial use.  They tend to have a minimum loan of £300,000 and can provide a bespoke and individual service.
  • Specialist lenders can lend against property with acreage which may not be mortgageable via a more traditional route.  This may include timber frame, timber clad property and property in need of refurbishment.  The lending via this route tends to be at a lower loan to value.

Types of use we often see mixed in with you using the property as a main residence include:

  • Development of outbuildings on the land
  • Acquiring planning permission for residential development
  • Holiday lets
  • Air BNB
  • Livery
  • Equestrian centre
  • Renting land to local farmers
  • Hobby farming
  • Annex for family to live in
  • Cattery
  • Kennels
  • Rental property on the land
  • Staff accommodation

Every property is different and everyone has their own set of needs and requirements for a property and therefore how it is financed.  Here at Fox Davidson, we have a simple way forward.

  1. Get in contact.  Have a quick ten minute chat with a Fox Davidson adviser.  They should be able to give you some initial thoughts and ideas.
  2. Our adviser will come back to you within 24 hours with an outline of some initial terms and a way forward.  They will also at this stage let you know the likely paperwork required to move this forward with a lender.
  3. If you are happy with this we can meet up or have another phone call to fun through your details a little further.  We will also collect your paperwork from you.  This gives us the information we need to give you a more formal recommendation.
  4. We will provide you with a formal recommendation and if you are happy with this we will submit the application for underwriting and the valuation to be instructed.