Properties with agricultural ties, also known as agricultural occupancy conditions, require specific mortgage products due to restrictions on who can live in them. These properties are typically reserved for individuals working in agriculture or related industries.
Understanding the eligibility criteria and potential challenges, such as resale difficulties and compliance with occupancy conditions, is crucial.
Specialized lenders offer tailored mortgage products for properties with agricultural ties. Consulting with mortgage advisors who understand these unique properties and thoroughly researching the conditions and implications can help secure suitable financing.
Understanding the Challenges
Securing a mortgage for a property with agricultural ties can be more complex than a standard residential mortgage. These properties often come with specific restrictions, such as:
Agricultural Occupancy Condition (AOC): Requiring the occupant to be employed in agriculture.
Section 106 Agreements: Placing limitations on property use.
Overage Clauses: Affecting property value based on future development potential.
These restrictions can limit the pool of potential lenders and increase the difficulty in securing a mortgage.
Key Considerations
Specialist Lenders: Focus on lenders that specialize in rural or agricultural finance. They have experience with these types of properties and are more likely to understand the specific challenges.
Higher Deposits: You may need a larger deposit compared to a standard residential mortgage.
Valuation Challenges: The property’s value may be impacted by the agricultural tie, affecting the loan-to-value ratio.
Legal Advice: Understanding the terms of the agricultural tie or restriction is crucial. Consulting a legal professional can clarify the implications for mortgage eligibility.
Potential Lenders
While the mortgage market is constantly evolving, some lenders known for offering mortgages on properties with agricultural ties include:
Earl Shilton Building Society (ESBS): Offers specialized agricultural tie mortgages.
Building Societies: Some smaller building societies may be more flexible in their lending criteria.
Specialist Mortgage Brokers: Can help you find suitable lenders and navigate the process.
Important Tips
Early Consultation: Contact a mortgage broker or lender early in the process to assess your options.
Clear Documentation: Prepare all necessary documentation related to the property and your agricultural employment (if applicable).
Patience: The process may take longer than a standard mortgage application.
Remember: The specific requirements and options can vary depending on the nature of the agricultural tie, the property’s location, and the lender’s policies.