Case study
£1.5 million mortgage for a converted milking shed with ambitious redevelopment plans.
Case summary:
Loan-to-value: 75%
Lender: A private bank
Future plans: A replacement eco home and a separate smaller house, with potential holiday let use
Setting: An ex-farm complex with 14 acres on the title
Purchase price: £2 million
Mortgage arranged: £1.5 million
Property: A former 1950s milking shed, converted into a home
Construction: Steel frame, mixed cladding and a layered tile-and-tin roof
The client
Our clients were purchasing a property with the space and potential to create an exceptional home.
They had offered on a converted milking shed within a former farm complex. Alongside the existing residence, the 14-acre site offered the opportunity to build a self-sufficient eco home and a separate, smaller house for guests or potentially holiday letting.
They needed £1.5 million of borrowing to support the £2 million purchase.
The situation
Planning permission was already in place for two complementary houses on the land.
The proposed main residence would be built into the side of a long, grassy slope, away from the existing building. Once the new home was completed, the converted milking shed would have to be demolished.
A smaller, matching detached house would occupy a separate area of the grounds. The clients envisaged using this for visiting family and friends or potentially as a holiday let.
The immediate requirement was a mortgage to acquire the property, but any lender also needed to understand the changes planned for its future.
The unusual property challenge
The property’s agricultural origins, substantial scale and 14 acres of land made it an unusual residential proposition.
This was more than a home with a large garden. It formed part of a former farm complex, with permission for two new houses and the possibility of future holiday accommodation on the same title.
That combination narrowed the field of lenders willing to consider the purchase. We needed one able to assess the property as a whole and understand how the clients intended to use it.
The non-standard property challenge
Originally built as a milking shed in the 1950s, the building had been converted into a home in the 1970s.
It retained a substantial steel frame and was clad in a mixture of materials, including further steel. The roof had an unusual layered construction, comprising tiles with a layer of original tin underneath.
These features placed it outside many lenders’ standard construction criteria. Its established residential use did not remove the need for a lender (and a lender’s valuer) to be comfortable with the underlying structure and materials.
The security challenge
The lender also had to consider the impending changes to the property and their implications for its security over the title.
The planning permission stipulated that the existing residence would ultimately be demolished, with a new main home built elsewhere on the land. A second detached house would also be added, potentially introducing holiday letting alongside the clients’ residential use.
The property being purchased was therefore materially different from the completed site envisaged by the planning permission. The proposed works, demolition and any associated changes to the title or security arrangements needed to be understood from the outset.
Our solution
We arranged the purchase mortgage through a private bank able to consider the case individually.
Our approach brought together the existing construction, the extent of the land and the proposed redevelopment, giving the bank a clear picture of both the immediate purchase and the clients’ longer-term intentions.
We secured the required £1.5 million of borrowing against the £2 million purchase price, achieving 75% loan-to-value on a property with several overlapping complexities.
Our clients’ outcome
Our clients secured the mortgage they needed to proceed with the purchase of a property that offered the foundation for their future home.
The successful arrangement showed the value of matching the whole proposition to the right lender. Unusual construction, extensive land and ambitious plans each presented a challenge. Considered together by a private bank willing to assess the individual case, they proved compatible with the borrowing our clients required.
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