Mortgages With And Without Planning Permission

Planning permission can be an essential consideration of your property or land purchase. Get expert advice from a specialist broker to help secure your mortgage approval

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Home Property Types Mortgages With And Without Planning Permission
Pete Mugleston

Author: Pete Mugleston

Mortgage Advisor, MD

Nathan Porter

Reviewer: Nathan Porter

Independent Mortgage Advisor

Updated: March 18, 2024

How we reviewed this article:

Our experts continuously monitor changes in the financial space and work closely with qualified mortgage advisors for factual verification.

March 18, 2024

Whether or not planning permission is necessary or obtainable can be a deciding factor for many buyers looking to secure the right land or home for their building project.

In this article, we’ll look at what planning permission is, whether you’ll need it, and how the planning status of your new property can affect your ability to get a mortgage.

What is planning permission?

If you’re planning to build a new property, add to or significantly change an existing one, you’ll typically need to apply for planning permission. This is a certificate of permission to carry out the work from your local authority’s planning department. In most cases, building without permission is illegal, and the worst-case scenario would be having to destroy your creation.

There are two levels of planning permission, outline and full, and the type you’ll need will depend on the size and scope of the project. During the conveyancing process of your purchase, solicitors will check whether or not planning permission is in place, or has been sought/granted in the past.

Is it always needed?

Not necessarily, however, you should always check before venturing beyond the planning stages of the build. To check whether or not you’ll need to apply for planning permission, visit the planning portal for more information.

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Can you apply for planning permission before buying property or land?

You can, but with property, you’ll need to inform the current owner of your intention to do so. Although being granted planning permission may be the deciding vote for your purchase and save you time if you do go ahead, it’s important to note that the vendor is under no obligation to wait for your permission to be granted and can sell to another buyer in the meantime. In this case, you likely won’t be reimbursed for the cost of the planning application.

With a plot of land it’s a little bit easier, as you can purchase an ‘option’. An option allows you to lock in an agreed price, so long as the purchase is completed by a certain date. This provides time to seek planning permission before you commit to buying the land.

Can you get a mortgage on a property without planning permission?

If you’re buying a house with additions such as an extension or annex, that has been completed without planning permission, you may find it more difficult to get a mortgage, however, it will depend on when the building work took place.

There are lenders that will lend in these circumstances, however, there may be a caveat, such as having to apply for retrospective permission, have a full survey carried out, put indemnity insurance in place and/or provide a larger deposit.

What about buying land without planning permission?

Land is not generally purchased using a mortgage unless you’re financing the entire project through a self-build mortgage. Even then, not all such home loans will include the provision to purchase land and you may need to already own it.

As land without planning permission cannot be built on, you’re less likely to be approved for a mortgage than if you’re purchasing land with permission already in place. It may still be possible to find a lender to help you if you’ve made an application and are awaiting approval.

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Can you get a mortgage for a house with an extension without planning permission?

It’s possible, yes, depending on the size of the extension. Smaller builds may fall within the permitted development rights regulations, in which case, planning permission would not have been necessary. Lenders will then typically be led by the advice of the property surveyor and may request a more substantial survey, to ensure the structural integrity of the extension.

What is the 4-year rule?

If you’re buying a property with an extension that’s been completed without necessary planning permission, the completion date of the associated works is important. If the work was carried out more than 4 years ago, the planning department is no longer able to enforce the requirement for planning permission, and therefore it is no longer an issue. This may reduce the lenders available to you, however.

If the extension has been built within the past 4 years, you’ll need to obtain permission retrospectively through a ‘lawful development certificate’. If the current owner was responsible for the build, your solicitor will advise that they secure this certificate or apply for indemnity insurance on your behalf, before the sale is complete.

How a broker can help you with mortgages and planning issues

A broker with experience in securing mortgages for borrowers that are looking to build or extend their own home will be well placed to recommend the right type of product for your needs, as well as which lenders will be most likely to approve your application.

Aside from knowing which lenders will expect existing planning permission to be in place prior to purchase, and how long needs to remain on said permission, they’re aware of lender preferences in terms of building types. Self-build mortgages are a niche area of the market, and within that niche, some lenders may not accept an application if your intention is to build certain property types, such as an annex onto a terraced property, for example.

This area of lending can therefore be fairly complex and it’s highly recommended that advice is sought from a broker with the necessary experience and knowledge to help your purchase go smoothly. Get in touch today to be paired with one of the expert brokers that we work with.

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How do lenders view planning permission?

If you’re purchasing a home that is advertised as having the potential to expand ‘subject to planning permission’ (STTP) it means that planning permission is not yet in place. For a residential mortgage, this shouldn’t make too much of a difference, and the lender’s main concern will be whether the sale value is accurate, given that planning permission is not included.

When it comes to self-build mortgages, however, there are very few lenders that will approve a loan unless existing planning permission is in place. It’s also likely that you’ll need there to be a minimum period of 3-36 months remaining on the planning permission, depending on the lender.

Can you get a mortgage on a property or land that already has planning permission?

Absolutely, and although this might mean paying a higher purchase price, in the long run, this could save you a lot of time and effort. Any existing planning permission will transfer with the land or property you buy, so unless your intended use is very different from what the permission was granted for, you’ll be able to begin building immediately post-purchase.

Speak to a broker about getting a mortgage involving planning issues

If you’re looking to purchase property or land for a project that will require planning permission, a broker with expertise in this area will be able to guide you through the entire process. They know which lenders will lend under which circumstances, and can recommend alternative finance options where a mortgage is not currently viable.

Our free broker matching service will put you in touch with one of the experts that we work with who has specific experience in this area. Simply call now on 0808 189 2301 or make an enquiry. Your initial consultation will always be free of charge and you’re under no obligation.

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FAQs

Whether or not your project requires planning permission, you’ll still need to be aware of, and ensure that you comply with the current building regulations when building or adding to a property.

They apply to residential, as well as commercial building projects and it’s likely that you’ll need to submit a building control application to your local BCB (Building Control Body) unless you’re hiring a contractor registered with the competent person scheme to carry out the work.

There are a whole host of reasons that planning permission could be refused, and a lot of them will depend on the type of building you’re planning.

If you’re simply looking to build your own residential home or extend an existing one, the most common grounds for refusal are:

  • Overshadowing or loss of privacy to neighbouring properties
  • Harm to the host building – more common if the property or those surrounding it are listed, but can apply to any location
  • Detrimental impact on neighbouring amenity – this goes beyond the actual neighbouring properties and can include balconies, gardens, parking etc
  • Failure to meet size and/or quality standards – for example, homes need to meet minimum size standard and allow for natural light in each room
  • Negative effect on character or appearance – this usually applies if your property design is too different to those around it or would be considered an eyesore and is enforced more commonly in conservation areas or AONB (Areas of outstanding natural beauty)

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About the author

Pete, an expert in all things mortgages, cut his teeth right in the middle of the credit crunch. With plenty of people needing help and few mortgage providers lending, Pete found great success in going the extra mile to find mortgages for people whom many others considered lost causes. The experience he gained, coupled with his love of helping people reach their goals, led him to establish Online Mortgage Advisor, with one clear vision – to help as many customers as possible get the right advice, regardless of need or background.

Pete’s presence in the industry as the ‘go-to’ for specialist finance continues to grow, and he is regularly cited in and writes for both local and national press, as well as trade publications, with a regular column in Mortgage Introducer and being the exclusive mortgage expert for LOVEMoney. Pete also writes for Online Mortgage Advisor of course!

Read more about Pete

Pete Mugleston

Mortgage Advisor, MD

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