Parents giving me a site but can't afford to build

[Propertyworries]

Nc due to detail. Please don't flame because I know I'm lucky.

So. I am in my late 20s, single, no children. Income 29k, savings 18k.

My parents have a farm with:

A modern bungalow (their home)
Run-down farmhouse,
Several old cottages (2 with roof on)
Building site with founds in.

Run-down farmhouse is where I live with sibling.
It's soaking wet due to being solid stone walls directly on clay with no founds or damp course. Think mice, slugs everywhere, devil's coach horse beetles, crows in roofspace, mould, freezing cold.
The whole thing needs gutted.

We live here for free as it is too bad to let out. Brother will inherit this house and entire farm. He wants me out in order to hang out with mates/GF here. He has no savings and likes to spend on clothes, going out etc.

I cannot buy locally as prices too crazy.
Parents are offering to give me a site but the house on it will cost min. 170k to build plus 8.5k for electric. I am afraid to do this alone, don't think I can afford it and prices are through the roof.

Thought about doing up a cottage, but unmortgageable.

It's stressing me out and I don't know what to do

Eat one thing I have considered is just building the garage first (5m x 6m, full PP on site) and living in it... but that would use up my deposit.

Guess I'm just going to live with slugs for now :/

Zoya I was initially pretty pissed off when I realised he was going to get it all... about £1.5m worth and yet no-one can lend me 10 grand

But in reality, he's inheriting a very unprofitable business and a load of clapped-out buildings needing repairs.

They are all adamant it must never be sold after 300 years in the family etc.

I mentioned that they could maybe leave me a field for a pony or whatever but that got shot down. It probably wouldn't be much use to me anyway realistically.

If you are in England look at the new Government Help To Build Scheme. It gives you an "Equity Loan" of up to 20% of the cost. Your mortgage lender needs to be signed up for the scheme. If you use the Scheme it can take your deposit amount down to 5% of the cost. The Government Loan is interest free for the first 5 years and not too bad in year 6 but rapidly spirals so you'd want to be able to pay it off asap after Year 5 - remortgaging would be a way to do that. You need to save up like mad to have a contingency fund as well as deposit. It will be worth it in the end. Farming holiday cottages is certainly more lucrative than farming sheep.

Great position to be in! Personally I’d buy a quality two bed static caravan and live in it onsite for six years while saving madly. Concentrate on developing your career. Consider having a friend live with you to pay the bills. Travel in your holidays.

You’ll have 70k - 100k saved (possible upper amount if you develop your career). That will enable you to have a smaller mortgage and allow time to plan the house design with an architect and research. Would enable you to sit with the design and thoughtfully modify plans over the years.

This would also give you a smaller mortgage that you can pay off quicker. Id likely rent our a couple of bedrooms to help with costs.

Like op have said, buy a second hand static caravan, get services laid on to the site & live in that until you can afford to build. A lot of static caravans sites have rules where anything older than 10 years has to be removed from the site, these caravans can be well insulated, double glazed & have central heating, for £15k you could get a lovely one to live in. Look with one that has freestanding furniture & you can furnish it yourself, then take the furniture with you when you can afford to build. I have a friend who owns a field with an outbuilding that they are going to convert in to a house, this is what they are doing.

Please be careful that any finished house is saleable - proper legal access road etc
A friend built on family farm but the deeds say there is no access right over the farm land (also they built so close to main house that few people who want to live there would like such close neighbours) so he's stuck with it regardless of if he wants to move for love or work...

hairymutt there's an idea! I really don't like the design that's been passed already, it's ugly as sin and the bedrooms are poky.

My only fear is inflation continuing as it is now. I feel like my savings are devaluing in the bank with every year that passes.

Beware of the Right to Build scheme if you are being gifted the land. The scheme is based on percentages and therefor the government takes a cut of profits. You could (in cases like yours) end up paying back MUCH more than you borrowed.

e.g. typical scheme

Deposit: £20k (5%)
Equity loan (from government): £80k (20%)
Repayment mortgage: £300k (75%)
Total amount of build cost: £400k
After 5 years you pay back equity loan and your home is valued at £500k which is 25% equity increase so you pay back £100k against the £80k you borrowed (125% of the £80k the government leant you).

In your case (approximate figures):

Deposit: £10k (5%)
Equity loan (from government): £40k (20%)
Repayment mortgage: £150k (75%)
Total amount of build cost: £200k
After 5 years you pay back equity loan and your home is valued at £500k which is 150% equity increase so you pay back £100k against the £40k you borrowed (250% of the 40k the government leant you).

i.e. the increase in value on yours will be much bigger because you were gifted the land and are likely to have lower build costs, so the amount to pay back will be much much higher.

I'd walk away from the whole thing personally and find myself a flat in town/a local city or a house share.

You’re financially much better off saving the cost of the build before building then getting a mortgage. A mortgage of 150k over 25 years would in fact cost you 225k on 3.5% interest. Over a longer 35 year period a 150k mortgage would cost you 260k. So in theory you save 75k interest payment or 110k interest payment

www.moneysavingexpert.com/mortgages/mortgage-rate-calculator/

Have a play with the figures

@HairyMuttttt respectfully, I would question that given that the cost of property and the cost to build are both rising at significantly more than the current interest rates.

Try the Ecology Building Society. They specialise in this sort of build, will release money in stages, and are a small org that actually answers the phone.