The Intermediary – April 2025 - Flipbook - Page 71
B RO K E R B U S I N E S S
Case clinic
even an accountant’s certificate. We would
ask for a projection for year two to back up the
sustainability of the first year’s earnings.
The only issue we would have here is around our
max LTV of 80%, meaning we would need a 20%
deposit as a minimum to proceed.
This lending is typically restricted to 60% LTV;
however, on this occasion it would not be possible
due to the applicants not meeting the restriction
of the occupation.
The farming part would be an issue for the
society as well, even if this is small.
SUFFOLK BS
TOGETHER
We would be able to consider this case once
the client has two full years of accounts under
their belt.
Failing this, the client would stand the best
chance of getting a mortgage elsewhere if they had
a chartered or certified accountant giving them
a reference.
The client would also be well advised to
demonstrate that they are in a similar line of work
to their previous employment, if possible.
Detailing current and previous contracts since
going self-employed could also help support their
application.
The client would have more options available
to them if they could find another 5% deposit, as
this would take them out of Mortgage Indemnity
Guarantee (MIG) territory, which is generally
required on higher LTV lending.
Together would be happy to lend on the property,
assuming all the AOC restrictions were adhered to.
If the land was not being used for agriculture
work then this would come under our normal
residential range.
C AS E FOU R
Large rural property with
agricultural ties
couple earning a combined £95,000
annually (£60,000 and £35,000) are
looking to purchase a £700,000 rural
property with 10 acres of farmland.
This comes with an agricultural occupancy
restriction (AOC).
The restriction requires at least one applicant to
be employed in agriculture or forestry, but neither
currently works in these fields.
However, one applicant has experience in
land management and is considering part-time
agricultural work, which could potentially meet
the AOC requirements.
The couple plans to use the land for smallscale farming and self-sufficiency, rather than
commercial agricultural income.
A
BUCKINGHAMSHIRE BS
The society can consider lending where there are
large acres and agricultural ties.
UNITED TRUST BANK
Sadly this application would not be suitable for
UTB Mortgages due to the agricultural occupancy
restriction which would significantly limit resaleability.
HARPENDEN BS
We can consider properties with agricultural ties
up to 50% LTV, as long as we can be comfortable
that the restriction is met by the applicants.
We can accept properties up to 20 acres
depending on the planned usage for the land – for
example, not commercial farming.
SUFFOLK BS
This is a really complex case and not an area we
lend in.
A lender will be looking at the farmland element
of the application. The substantial acreage could
also be another deterrent.
Over and above the property itself, the applicant
is considering a potential change in employment to
agricultural work.
However, the case doesn’t say if this is to
supplement an existing part-time role or would be
instead of their current employment.
If it is ‘instead of’, this could potentially impact
the current income.
It’s more than likely that the applicant would
need to be employed in agriculture in the
surrounding area prior to purchasing the property
to meet the AOC.
So, they may fall at the first hurdle if their
income drops substantially due to their change of
career direction.
The farmland element, the size of the plot, and
the AOC all restrict resaleability, which makes the
case a difficult one for many lenders.
We would advise the applicants to gather the
largest deposit that they can and work closely
with their mortgage broker to find a
suitable lender. ●
April 2025 | The Intermediary
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