Land

[Aug12]

Hello everyone

We’ve seen some land locally and have been dreaming about purchasing. We only have half in cash and was thinking about taking a personal loan to cover the rest. Is this generally allowed? We were thinking the amount we would need to borrow could be paid off fairly easily in comparison to our mortgage and then we could live the dream. The land has planning on it and our dream is to live an off grid, self sufficient lifestyle with an eco build/cabin. We would want to work on this ourselves slowly and live mortgage free.

I am completely aware this will sound completely crazy to most and I’m very happy to be told this can’t work and reasons why, also any thinking points to consider and general advice really.

We have a 4bed home that’s mortgaged atm and we have children to consider also.

So can you pay the loan on the land at the same time as your mortgage? Imagine you bought the land today, spend another £200k making a basic habitable cabin on the land, all while living in your current home any paying the mortgage for the next 5 years. Is that financially viable?

also, do you and dh both have full time jobs? Who is going to project manage your building work because that is a full time job too.

£200k for a basic habitable cabin? What are you talking about 200k would build you a decent house. The houses on Grand Designs only costs so much because they mess about being alternative rather than just building a normal house (but I guess that's why it's called Grand Designs not Normal Sensible Couple Build Normal Sensible House)

I'm assuming you are thinking of building a home on this land and then moving into it? What will you do with your existing house - sell it, or rent it out?

You probably need to speak to an independent financial adviser.

OP where are you planning to live whilst building the house? Can you cover current mortgage and the loan payments or will you need to sell up and move into cheaper accomodation or something temporary on site?

Do you or DH have experience or contacts? If you can do a lot of the work yourself it wouldn't be so bad but if you have to buy everything in from architecture to bricklaying then it's going to be expensive.

If you are getting a loan for the land where does the money for the building come from, the sale of your current house? How much equity is in that?

Beware that when applying for personal loans,they generally don't approve it if you ask for it for buying property. However, if you say that you are going to buy a car or do home improvements, they seem quite happy with it.

I bought some garden from a neighbour and financed it this way. You will still need a conveyancer, who will ask for the source of funds for fraud prevention.
You should do normal searches on that land too

Check the terms of the planning permission: it doesn’t last indefinitely.

Thanks for the quick responses. Yes, we could cover both the mortgage and the loan repayments, however that would leave little money to actually be able to work on the land so the plan would be to sell the house and use the equity to plow in to making some progress. Our plan was to put drainage in, dig in an access road and put a residential caravan and live on site, whilst we woke on digging a boar hole for water etc. We have granny just a few miles away that the kids to go to for showers or sleepovers in the colder weather. We are very handy for contacts, hubby is a heating engineer and his brother is a joiner, another family member is an electrician so a very handy family and confident most could be down by ourselves to keep costs minimal.

Sounds fab but do not underestimate the awfulness of living all together in a caravan, even in good weather, let alone a winter. If doing the work yourself triple the amount of time you plan for it to take! And living off grid - the infrastructure needed will cost £££. If possible go to a self build expo and grill others who have done it.

Does the land have planning permission or are you confident it complies with the local plan policies so you are likely to get permission? In my job I've lost count of the number of people who buy land and think that they'll easily get planning permission and are staggered to find out it's almost impossible in rural areas, outside of settlements

There will be things to pay for above the list you've given, e.g. connection to mains sewers.

Are the utilities and waste water services already at the plot? That can be very expensive if not.

Hello,

yes, confident it has planning for a 3bedroom bungalow currently, confirmed with local council and the ad has the planning reference number to check.

We wouldn’t want to connect to mains as we would like an off grid set up. We would be looking at a septic tank for waste, borehole for water, solar for electric with lpg gas and a wood burner for our heat needs.

Power would be with a generator initially as the solar setup we are looking at it quite costly but this would eventually be switched to solar. Our top priorities with the house equity would be digging in the access road, buying a residential caravan and haulage to get it on site, getting the septic tank and borehole sorted. We would run lights off battery and generator, gas for shower, fridge and oven and then also have the generator for the initial set up until we can set up properly. Washing would need to be taken weekly to the laundrette. Does this sound sensible? Thanks

No experience but watching with interest, good luck OP

@Mumblechum0 thanks :) If it’s something you are also looking in to, there is a YouTube family we follow that give loads of advice and show their set up etc. They are called Off Grid family UK.

If it was a good idea a builder would already have snapped up the plot. What happens when you drill your borehole and never hit clean water?

If it already has planning permission, and assuming it doesn't have any restrictive planning conditions such as an agricultural tie which will prevent you living there and/or restrict future saleability, then it sounds promising. I would be cautious about being entirely off grid- we have log burner/solar/ grey water/ septic tank combo but also have mains water. We also have mains electricity back up because there are often times in winter when solar is not enough, even with batteries. We looked at wind turbines but for a lot of winter it's either too windy or heavy, still fog so they wouldn't justify the cost. Our set up is very cheap to run though

The whole situation with septic tanks is becoming much much more complicated

If the borehole fails then I suppose some sort of rain water filtration system would be a back up but I would hope to not go down that route.

thanks for the words of wisdom @Thatsanotherfinemess1 we planned to be totally off grid but maybe a back up would be useful with young kiddos. How long have you been off grid? Do you have any thing you wished you did or didn’t do?

@JohnofWessex how so?

thanks

As long as planning is in order and you can get water out if the borehole than I think it sounds magic. Especially with granny’s down the road for some home comforts while you get set up. I hope you keep us updated!

I would want a survey done for the likelihood of a borehole hitting adequate water. You could speak to local companies that specialise in them in the first instance for some advice.
Our house is 250 years + old and would originally have had a well. We had to replace our borehole 6 years ago and it has again failed and we have just had to sink another for the farm and are going on the mains in the house as a back up. Be a good idea to find out how far away a mains connection would be.

The EA has a whole complex set of regulations for septic tanks and soakaways now. Most existing ones don’t meet current requirements. However it depends where you are in terms of water courses. Nothing is easy though. We have solar panels, an air source heat pump and 4 batteries for storage. That set up is efficient but it’s costly to install.

Have you done a costs list for:
Borehole (including survey)
Septic set-up
Access road
Caravan
Solar panels
Lpg installation
Wood burner (with hetas certificate)

Then, what about the costs of the eco build/cabin?

Would you need to pay for new drawings/planning amendment or would you build what the current planning permission shows?

Just another thought on unexpected costs that grand designs doesn't tell you about- what does the planning permission say regarding financial contributions or on site requirements? Depending on the area local authorities can now require payments to provide local improvements and offset the impact of development. This is a major reason why developers have slowed building rates as costs are spiralling. Payments can include community infrastructure levy payment (although these can be waived if you are self building), education contribution if there is a shortage of school places, biodiversity net gain where improved habitat must be provided or off site credits purchased, phosphate/nitrate mitigation and water conservation measures etc. Some of these will be easily incorporated if you're off grid but others can be £10-20k. It very much depends where the plot is

Thanks all for the thoughts, taking it all on board. I will call round local companies and ask about likelihood of hitting water re borehole. Also I had no idea about site contributions, I will have a further look in to this, thank you.

We did a VERY rough cost up of buying a second hand digger, dumper, price of hardcore by the lorry fill, looked at prices of a second hand residential, septic tanks etc not precise but it would be looking to use practically all of our home equity to get those basics in place.

Yes we have wondered why it hasn’t been snapped up yet by someone with a much deeper wallet than us, it does seem to good to be true, making us wonder if there is something we don’t know. For us, it’s the perfect location, on our home turf that we grew up and just a 10minute drive to granny’s house, which is driving this want to take out a personal loan to just secure it. Land/houses don’t come up a lot in this area and if they do, the prices are usually well out of our reach. Equally we can’t act too hastily and get ourselves in to a mess with young children if we buy then later realise there was a reason no one else was interested in it. Thanks

We looked at doing a self-build a few years ago but in the end found it too tricky round here (green belt so planning is a nightmare).

you can get build mortgages for precisely this scenario. They might be cheaper than a personal loan.

I think the stuff you are talking about for off grid living could be expensive. We had to get our cesspit replaced and it cost a lot. The price of everything has gone up and up.