Buying A Site

T

THE LATCH

Guest
Hi all,

I was thinking of buying a site, but recently read somewhere that a loan will not be released until planning permission is granted. Does this mean you must have your own money to buy a site that has no planning permission?

I mean how can you apply for planning if you cannot borrow the money to buy the site in the first place??

Hope you understand my question.

Any help?
 
I presume that you get mortgage approval in principle (in the same way as if you were buying a house), agree the purchase of the site subject to planning permission, apply for planning permission, get it hopefully, finalise the purchase of the site and away you go.
That's what makes most sense to me, but of course that doesn't mean it's the way it happens......
 
If you don't even own the site that you can use as collateral on which to secure the loan then I can understand why the lender will not want to advance a mortgage given the risks that it exposes them to.
 
Normally we don't associate the banks as having the customer's interest at heart, but in a roundabout way in these cases they do. As Clubman has said, the banks want to protect their own interests of course, but equally it's to protect you from buying a field and that's all land without planning is, is a field. It doesn't become a site until some form of planning permission exists on it.
Talk to your bank and let them know you are applying for Full planning permission on the land and then will purchase subject to approval. They will let you know then, if they will finance you and for how much % wise of the land cost. Talk to your solicitor about the process involved for buying 'Subject to planning approval' and hopefully you get the ball rolling from there.

In a way it's just the first indication that the selfbuild process is not as easy as people think and is not going to be as straight forward as just buying a house.

Have a look at this article here for some general guidelines:

[broken link removed]

AndyH
[broken link removed]
 
a mortgage lender will approve you in principle to purchase a site, however as stated you will only receive a loan offer, once full planning permission has been obtained.
A mortgage in lay mans terms is a loan secured on a property, without planning permission its basically a field.

So you have to go through the process of applying for planning permission on a site that you do not own, so you do have outlay costs ie architect, planning office costs etc, to factor in.
 
thank you all for your help, some great information. keep ideas coming. ta.
 
one other point. If you were to apply for planning (before purchase), and got permission, what's to stop the owner then pulling out of the deal, and then advertising the site again, this time with planning permission, and asking for 4 or 5 times the price because there is now planning with the site???????
 
THE LATCH said:
one other point. If you were to apply for planning (before purchase), and got permission, what's to stop the owner then pulling out of the deal, and then advertising the site again, this time with planning permission, and asking for 4 or 5 times the price because there is now planning with the site???????
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Generally there are three tiers in this area:

a) a field with full planning permission already achieved, these obviously go for top whack
b) a field for sale subject to planning, this attracts a certain premium
c) a field for sale. With these you pays your money and takes your chance

Also I think, a field subject to planning, once planning permission is received it is in the name of the person who applied for permission. Therefore the owner can't gazump you as permission attaches to a particular person and the field rather than the field on its own.
 
a field subject to planning, once planning permission is received it is in the name of the person who applied for permission. Therefore the owner can't gazump you as permission attaches to a particular person and the field rather than the field on its own.
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correct, the planning permission is the name of the individual who has applied for it, and for the specific property they wish to construct, the site can not be sold on at a higher premium based on the fact theres now planning permission...the person then subsequently buying it would still have to apply for planning permsission in their own name, however the vendor of the site knows that planning permission is obtainable...... its a chance you take, and a costly outlay considering theres no guarantee you will get planning, normally, you would put down a booking deposit, apply for planning, and upon approval of planning permission put down the rest of the deposit and sign a contract to purchase.

Note that lenders will advance approx 80% of the purchase price of the site once planning permission has been obtained.
 
Thanks once again to all of you. your all so helpful, as i am new to all this stuff!
 
correct, the planning permission is the name of the individual who has applied for it, and for the specific property they wish to construct, the site can not be sold on at a higher premium based on the fact theres now planning permission...the person then subsequently buying it would still have to apply for planning permsission in their own name, however the vendor of the site knows that planning permission is obtainable......
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Unless there is a rural resettlement clause in a planning permission, or the like, it doesnt matter whose name it is in- anyone can build.

what's to stop the owner then pulling out of the deal, and then advertising the site again, this time with planning permission, and asking for 4 or 5 times the price because there is now planning with the site???????
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A contract- do not go to the expense of applying for planning permission without a contract being in place to buy subject to planning.
 
Unless there is a rural resettlement clause in a planning permission, or the like, it doesnt matter whose name it is in- anyone can build.
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anyone can build but they cannot use someone elses planning permission, unless the site is being sold with outlining planning permission, which i presume in this instance is not the case.

if a site is for sale without planning and (A) applies and is granted such planning, then a subsequest buyer (B) cannot use (A)'s planning permission they must submit their own planning permission.
 
Vanilla said:
A contract- do not go to the expense of applying for planning permission without a contract being in place to buy subject to planning.
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... so is it 'normal' to do this ie. have a contract in place such that if planning is granted that the seller MUST sell at the agreed price....but likewise, the buyer has the option not to go through with it if he so desires?

ninsaga
 
ninsaga said:
... so is it 'normal' to do this ie. have a contract in place such that if planning is granted that the seller MUST sell at the agreed price....but likewise, the buyer has the option not to go through with it if he so desires?

ninsaga
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Possible but highly unlikely. After going through all the rigmarole and expense, it very rare that a buyer will then pull out at the last fence...
 
anyone can build but they cannot use someone elses planning permission, unless the site is being sold with outlining planning permission, which i presume in this instance is not the case.
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I'm not sure that this is true- I always thought one could use someone elses planning- the only problem might be with copy right on the drawings- but if the designer is willing...



so is it 'normal' to do this ie. have a contract in place such that if planning is granted that the seller MUST sell at the agreed price....but likewise, the buyer has the option not to go through with it if he so desires?
Click to expand...

It is normal when you are buying a site that you would enter into a contract to purchase subject to planning permission being granted. The conditions would have a time limit for obtaining planning, and usually there would be a clause stating that the purchaser would have to apply for planning as soon as possible - and might even have a time limit on the date the application should go to the council, the purchaser would have to buy if they received planning permission which was satisfactory to them- i.e. with conditions they were happy with. Vague, but necessary because the purchaser might want to build a two storey but only be granted permission for a bungalow. As tall paul says, it is unlikely that a purchaser who has gone to the expense of a planning application will pull out for no good reason.
 
tallpaul said:
Generally there are three tiers in this area:

a) a field with full planning permission already achieved, these obviously go for top whack
b) a field for sale subject to planning, this attracts a certain premium
c) a field for sale. With these you pays your money and takes your chance

Also I think, a field subject to planning, once planning permission is received it is in the name of the person who applied for permission. Therefore the owner can't gazump you as permission attaches to a particular person and the field rather than the field on its own.
Click to expand...

c) a field for sale. How often do people take that risk and what happens if it goes belly up.
 
We bought a field and then applied for planning.
It was a risk we were prepared to take and in our case it paid off.
But it wouldn't be a risk most people would be willing to take.
If you are buying the site through an auctioneer then he/she would be used to this practice and would have a contract for the vendor and purchaser to sign but these are not binding.
 
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