Can I get a self-build mortgage on land without planning permission?

Answered on 8 August 2019

My wife and I are architects and have found a plot of land (currently a garage/workshop) for sale that we are interested in buying to build a small home for ourselves. The site has no planning history so that adds a bit of risk but we are relatively confident it wouldn't be a problem to get planning for what we intend to build. We would be looking to get a self build mortgage first to buy the land and then start building. Is it possible to get a self build mortgage on a plot of land without the security of having planning permission? It is an end of garden site but was sold of separately about 10 years ago. With self build mortgages you get the loan in stages. So if we did secure a self build mortgage large enough to cover what we have designed, bought the plot of land and then didn't achieve planning would we have to take the full mortgage or could we stop it at the first instalment we received to buy the land?

Unfortunately self build lenders will require outline planning permission at the very least before lending on the proposition. Although self-build loans are released in stages, the total loan is based upon the end value of the proposed new property, hence why they need outline planning as a minimum. They won't release any monies without this being in place, as if planning couldn't be obtained, then it would leave the lender holding a first charge mortgage on a piece of land, that would have a very limited value, and restricted saleability.

Alternate Financing

It may be possible to look at bridging finance to help you buy the property, and then refinance to a self-build mortgage, once the planning permission has been granted. Alternatively you can read our blog on planning permission.

If you'd like to discuss your options in more detail, then please contact one of our consultants on 0330 433 2927 and they'll be able to give you an idea of how we can help.

Ask The Mortgage Experts answers are based on the information provided and do not constitute advice under the Financial Services & Markets Act. They reflect the personal views of the authors and do not necessarily represent the views, positions, strategies or opinions of John Charcol. All comments are made in good faith, and John Charcol will not accept liability for them. We recommend you seek professional advice with regard to any of these topics where appropriate.