I have been playing with the idea of buying land for an eco self-build for some time and have my eye on somewhere as a serious option for me. However, coming from ‘Generation Rent’ - I have little idea of the mortgage process and restrictions for self-built properties.
The ‘Eco Resource’ has some good recommendations for companies I can approach for further enquiries. But in the meantime, it would be great to get feedback here - can anyone let me know what they’ve built, who their mortgage was with, experience with cost and duration, and also - what type of buildings can be/might not be covered? I have an idea to include a yurt within my plans - would this be excluded?
And would a part-time residency (where I’d be split between a semi-detached house and the eco-residence) cause a problem for finding a mortgage - as a first time buyer or otherwise?
Mortgages can be sought for buy to let or for owner occupied. For a multi dwelling property, I would be seeking a buy to let mortgage, which does allow rental of a room by the owner.
It’s very difficult to secure a mortgage until a property is built. On a project like this (and it’s worthwhile watching a few Grand Designs programs for point of reference), it’s usual that the owner would buy the land, build the house, then seek the mortgage. A bridging loan is usually used to tide the owner over until the mortgage is secured which can pay it back.
Hope that makes sense - you need capital (significant - probably 20-30% of final purchase and build), a bridging loan for the rest, and then a mortgage after the building is ready. I would think you could cover the mortgage on the build. You could then erect a yurt for 6-10 months for rental, without planning permission (but worthwhile checking), and then rent that on air-bnb.