Getting a Mortgage to Buy Land

Buying land often requires a specialist lending approach compared to standard borrowing. Land mortgages and financing can vary, come with unique criteria, and require a tailored approach. Here, we’ll explain how land mortgages work, what types of plots you can buy, what lenders look for and how to get a mortgage.

Can you get a mortgage to buy land?

Yes, you can get a mortgage to buy land, but it typically won’t be a standard, pre-packaged mortgage product. Instead, you’ll need a specialist type of land mortgage or a self-build mortgage (if you plan to build a property on the plot). The exact financing classification will depend on the land you’re looking to purchase.

Lenders typically take a more cautious approach because land is harder to resell if something goes wrong, so applications are assessed carefully. Generally, a land mortgage application will involve:

• A larger deposit (usually ranging from 30% to 60%)

• A clear exit strategy (e.g., build and refinance, or develop and sell)

• Supporting documents relating to business plans, planning status, or architectural designs

Types of land you can buy

Different types of land carry unique risks, uses, and lender requirements. Here’s a breakdown of common land types and how lenders may view them for a mortgage:

Eligibility criteria for a land mortgage

Each lender will have its own requirements, but key factors looked at when getting a mortgage for buying land include:

• Type of land: The type of land you’re looking to buy and your intended use for that land are crucial. This will immediately narrow down your mortgage options for buying land, as various lenders specialise in specific types of land purchases. Minimum and maximum loan amounts can also be a factor.

• Deposit and loan-to-value (LTV): Expect a higher deposit than a standard mortgage. Some lenders require deposits of 30% to 60%, depending on the planning status and land type. You’ll typically find that LTV limits are lower for land mortgages compared to standard mortgages.

• Planning status: Land with planning permission (outline or full) is much easier to finance. Land without permission is considered higher risk and may require a stronger exit strategy or stricter terms from lenders.

• Experience, affordability and credit: If developing or building on the land, lenders may prefer applicants with prior experience. Affordability may be assessed in a variety of ways, particularly for staged drawdowns (in self-build cases). Your credit history will also play an important role in the eyes of lenders.

• Valuation and surveys: Environmental reports, land surveys, and valuation assessments are usually required in varying degrees of detail due to the variable risks associated with different types of land.

How to get a mortgage for land

Here are some universal steps to follow if you are looking to get a mortgage on a land purchase:

1. Confirm the planning status: Start by checking whether the plot has planning permission (outline or full), as this affects eligibility, deposit size and your available lenders. If planning isn’t already in place, review local planning policies or book a pre-application consultation.

2. Speak with a specialist land mortgage broker: Most land mortgage lenders aren’t available to approach directly, so using a specialist broker is vital. They’ll identify which lenders accept your specific land type, explain the requirements, highlight any risks, and prevent applications from being sent to unsuitable lenders.

3. Prepare the required documents: Land mortgages require more supporting evidence. Expect to gather site plans, maps, planning documents, environmental assessments, access details, build plans, or business-use details. Providing this upfront reassures lenders that you understand the risks and have a clear plan.

4. Arrange a valuation and required surveys: Lenders usually require a valuation plus surveys such as an environmental report, topographical survey or ground investigation report. These help confirm the land’s true value and identify potential issues. Getting the correct surveys arranged early avoids delays later.

5. Demonstrate your finances and exit plan: You’ll need to show proof of deposit, evidence of contingency funds, and a clear plan for how you’ll use or develop the land. If you intend to build, lenders expect itemised costings and timelines. If you’re holding the land, they’ll want a clear rationale and repayment strategy.

6. Apply with a lender suited to your land type: Different lenders specialise in different land uses, so matching your application to the right lender is crucial. Your broker will introduce you to the lender best suited to your circumstances and goals for your land purchase.

7. Secure your offer and complete the purchase: Once your valuation and checks are approved, the lender issues a formal offer. Your solicitor will then handle land registry title checks, boundary reviews, rights of way, access agreements, utility rights and final completion. After completion, you can make your land purchase.

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How land mortgages are calculated

Land mortgage affordability isn’t based on typical income multiples. Instead, lenders consider:

• Value of the land today

• Planning permission status

• Resale potential and market demand

• Your development or exit strategy

• Breakdown of construction costs (if building on the land)

• Stage-release requirements (for self-build transitions)

If your intention is to buy land and build a home, the mortgage may later convert to a self-build mortgage, with funds released in tranches as the project progresses.

Are rates and fees higher for a mortgage when buying land?

Generally, yes. Land mortgages typically cost more than standard residential mortgages because lenders perceive the risk as higher, and the market is more niche.

The specialist nature of these loans and the limited choice of lenders means that overall, you’re likely to come across higher interest rates and higher arrangement and survey fees than a standard mortgage, along with potentially larger deposit requirements, which is why it’s crucial to approach the right lender.

Rates vary widely, which is why most applicants compare lenders through a specialist mortgage broker with the expertise to make detailed recommendations.

Do you need planning permission for a land purchase mortgage?

Not always, but it significantly helps. Here’s a quick overview of land mortgages with and without planning permission.

With planning permission

• Easier to get a mortgage

• Lower deposit requirements

• Greater choice of lenders

• Better rates and more competitive terms

Without planning permission

• Fewer lenders to choose from

• Usually, a higher deposit is needed

• You must provide a detailed exit strategy

• Expert support and guidance are essential

If you’re unsure, your broker can advise which lenders accept mortgages for plots without planning permission.

Full vs. outline planning permission

If the plot you are looking to buy has been granted full planning permission, the local authority will have detailed plans for the land. You must understand the nature of the consent granted; your lenders will also need to see these plans to inform their decision.

Outline planning permission, by comparison, will provide an indicative idea of the type of project that may be permitted in the future; however, it does not include detailed plans.

Why choose Money Helpdesk for your land mortgage?

Land mortgages require specialist knowledge, access to niche lenders, and careful presentation of your plans. That’s where we can help. We can introduce you to an experienced broker who can get the result you’re looking for.

Here’s why land purchasers across the UK choose us to help arrange their mortgage or financing:

• Access to exclusive lenders unavailable to the general public

• Free initial chat with no obligation to proceed

• Our advisors are 5-star rated on external review platforms

• Introductions to lenders comfortable with complex land buying

If you’d like to compare the latest land mortgage rates and options or get bespoke guidance for buying land with a mortgage, you can get started here.