Saturday 13th of April 2024

Private Finance: When is a mortgage not a mortgage?

Demand for country property is enjoying a surge, with more buyers than available stock.

Indeed, one Cotswold office of a National estate agency has recently reported that for the £2m – £5m price bracket, they currently have over 350 active buyers registered on their books. A particular feature of the market in most country property over and above £5m is the strength in demand for “best in class”, writes Jamie Rigby, Co-founder of Kentfield Private Finance.

Due to the lack of availability on the open market, we are seeing more country properties change hands off market than usual and are working closely with a number of buying agents who seek out properties away from the public glare. This is a trend that we expect to continue throughout this year. 

The demand is mainly driven by the desire for many to re-locate from town to country, following the post-COVID priority shift in many.

The Townmouse becomes the Countrymouse

Key areas such as the Cotswolds are seeing a large increase in demand. Rightmove recently reported that searches for homes to buy in the Cotswolds more than doubled (102%) in the second half of 2020 compared to the same period in 2019. It’s probably safe to say that this is the best market for country houses since 2007.

Financing Country Purchases

Obtaining a mortgage can often be a challenging process, but what happens when you are mortgaging a country property? As we all know, country properties are by their very nature, quirky and two are rarely the same and all part of the charm. With a ‘standard’ residential property, once a mortgage application has been made then the lender’s panel valuer is despatched to complete a pro-forma valuation report lasting no longer than 30 minutes. The difficulty comes when the valuer is presented with a property that won’t fit within their standard template.

Gardens measured in acres rather than yards is often a stumbling block for some lenders and their valuers. Typically, most ‘high street’ mortgage lenders are OK with 2 – 5 acres of gardens and/or paddocks, so long as all land is for the use of the homeowner and not for agricultural use. Horses are arguably not agricultural and more recreational. Even the presence of stabling and menage is unlikely to prove a deterrent.


Where the grey area starts is typically over 5 acres, where it gets difficult to justify at least 40% of the property being for residential use. When properties go over a certain acreage, in our experience these properties start to include the presence of additional outbuildings such as larger than normal stabling, agricultural barns, workshops, storage etc. These features will often suggest an element of mixed-use, which can render a ‘high street’ mortgage lender unwilling to help. These properties can still be mortgaged, but more often than not by challenger and/or private banks who will be more sympathetic to such properties, but these lenders typically charge higher rates of interest and fees than their high street competitors.

Bigger stumbling blocks to mortgage lenders is an additional dwelling, either in the form of an integral annexe or a separate accommodation building such as for staff or a holiday let unit. Lenders will generally see this as a risk to the vacant occupancy. Such properties can be mortgaged, but the field is limited.

When a mortgage is not a mortgage…

Whilst you may have found the home of your dreams, the fact that your new castle comes complete with a menage to keep the kids happy on Teddy and Mavis, a range of outbuildings for Dad’s ever-expanding collection of partially completed restoration projects, and 75 acres of never-ending mowing and somewhere to start the good-life dream, this property will ultimately lead to an agricultural loan rather than a traditional regulated mortgage.

The existence of such acreage with property, together with the outbuildings and fact that the word ‘farm’ features in its name on a plaque at the end of the 400-yard pot-holed drive will fail to convince a high street panel valuer on even the sunniest of spring days.

An agricultural loan itself is not to be feared as an alternative route to finance. Whilst the costs involved are traditionally more than a residential mortgage, a more flexible structure can be arranged to suit where necessary.

The key to the type of financing that can be arranged is to seek sound advice from the outset from a professional who understands the nuances of country property.



You may also like…

Join us on Facebook

Follow on Twitter