Barn conversion mortgages – Your options on lenders, rates & criteria
Conversions to barns can offer some of the most unique, beautiful, and spacious homes on the market, but a mortgage for a barn can be more challenging than purchasing a traditional residential property.
This guide will discuss the key considerations when buying or converting a barn. It will also explain the various types of financing available and how to get the loan you need.
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Is it possible for a barn conversion to be mortgaged?
Although possible, the process can be more complicated than buying a residential property. The type of mortgage you will need, and the considerations you should make will depend on whether your barn is already converted or if you plan to convert it yourself.
What type of mortgage do you need?
There are several financing options for barn conversions or buying an existing one.
Bridging loan
Buy to Let
Standard residential mortgages
A self builds mortgage is the best choice since they are specifically designed for this purpose. You may be eligible for a self-build mortgage if you plan to use modern, eco-friendly design elements and processes throughout the build. This will offer additional benefits like preferential rates, cashback or a higher level of borrowing.
This type of mortgage allows for the release of funds in stages. This will enable you to maintain a tight budget while still paying interest. You only pay interest on the amount that has been released.
How to obtain a barn conversion mortgage
It can be very rewarding to transform a barn into your dream house. However, it isn’t always easy and can be challenging to find the right financing for a barn conversion mortgage.
Talk to a mortgage broker who specialises in barn conversion financing –
You will need to get tailored advice from the beginning when dealing with a home, such as home-buying and building.
Expert knowledge of this area means that a mortgage broker can help you find the right financing for your project. They will also know the details of each stage. They can recommend the right surveyors and conveyancers to help you present your work plan to the mortgage lender.
You can avoid costly mistakes and potentially disastrous oversights by consulting one of our expert mortgage brokers.
Enquire below to begin your journey of a barn conversion mortgage. We provide mortgage advice specific to a converted barn.
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Rates and availability of lenders
A few high-street lenders won’t accept a self-build mortgage application for barn conversions. This type of lender is not often accessible without an intermediary. It’s essential to use a mortgage broker with experience in this field.
The interest rates on self-build mortgages are typically higher than those for traditional mortgages. Even if you buy a complete barn conversion, the property will be considered non-standard construction. This is due to the higher risk of lending on unusual properties.
Criteria for eligibility
Lenders will have different criteria depending on what type of finance they offer. However, the personal criteria can be used with other types of mortgages, such as affordability or creditworthiness.
However, if you are looking to buy or build a barn conversion, you will need to adhere to stricter criteria regarding the property. You may also need to deposit more.
A self-build mortgage requires a deposit of 25%. However, some lenders will accept less. Sometimes, it is possible to obtain bridging financing without a deposit, depending on your security assets and your exit strategy.
What is the maximum amount you can borrow?
This will depend on your goals and what you can borrow. If you decide that self-build is correct, you must meet the usual mortgage affordability criteria. Depending on your income and profession, you can borrow between 4 to 6 times your annual income.
The affordability calculator will estimate how much you can borrow based on your household income.
What is the process of buying a barn conversion?
You will need extensive research before thinking about finding the right lender. You may need planning permission.
Enquire below to begin the journey to mortgage approval.
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Permission to plan
A barn can be converted into a dwelling without needing full planning permission. However, 2014 legislation sought to simplify this process by adding ‘permitted developmental rights’. Before starting the project, you will need to give ‘prior notice to the relevant authority. They could also reject your proposal.
If:
- These plans are large enough to be considered a reconstruction rather than a transformation.
- The barn is listed
An architect with experience designing barn conversions will provide the necessary guidance and increase lender confidence in financing your project.
Other forms of consent
Barns are often older buildings that sit on land and have limited vehicle access.
It is essential to take into account the following when purchasing a building for conversion:
- Listed Status If your barn is listed, in addition to planning permission, you will need to apply for ‘listed building consent’ through the local authority. You will need to keep specific property characteristics intact in your design, and there will be restrictions on what materials you can use.
- Agricultural restrictions It is essential that there are no agricultural restrictions on barns or the land surrounding them. Although it is possible to remove such restrictions, it is a complicated and time-consuming process that may not result in the desired outcome. These restrictions can add significant costs to your project.
- Deed restrictions Having a barn that has been granted planning permission is a great way to save time and hassle. However, it’s essential to verify any deed restrictions. These could be restrictions on the property’s extension, building on specific plots, keeping livestock, or parking utility vehicles such as boats and caravans. It can also restrict your ability to extend the property. The worst-case scenario could be to demolish the converted property.
- Access and right-of-way – You’ll need permission from the local authority to gain additional access.
Resalability
This type of project is often undertaken by people who want to build their forever home. However, plans can be changed, and new opportunities may arise. The location and the build specifications will be crucial if you ever find yourself in a situation where you have to sell your barn conversion.
Certain areas have a greater demand for this type of property than others. High-spec properties with modern technology, quality finishes and high standards will be more attractive to buyers. Always do your research!
Surveys
You should ensure enough funds to pay for a complete building survey. This report is essential whether you are building or purchasing a barn conversion.
Budgeting
It’s quite common for this type of venture to run into unexpected problems and incur additional costs. A clearly defined financial plan, with a contingency account included, will help you relax and show lenders that you have considered potential pitfalls.
Talk to an expert in barn conversion mortgages.
Don’t let the complex process of converting a barn deter you from pursuing your dream. You can use our free broker matching service to find a broker with the experience and knowledge necessary to help you build your dreams with minimum stress.
Our brokers are experts in self-build mortgages and financing barn conversions. Enquire below. We will ensure to find you the best mortgage lender for your barn.
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