Woodland Mortgages Explained

Are you based in the UK and looking to buy a plot of land made up of woodland or forest? Before going ahead with your plans, it’s worth having a solid understanding of how a mortgage for this type of property works and what goes into the finance calculations.

This guide covers everything you need to know about buying woodland areas with a mortgage. You’ll also find out what rates to expect and where to get the expert support you need.

Keep reading for all the details, or click the link below to jump straight to a section…

Can you get a mortgage to buy a woodland?

Yes, this is possible, but it will be a slightly different process. Few opportunities exist to buy forests or woodlands in the UK, so most lenders are not used to offering mortgages on them. For the limited number of niche lenders able to provide finance under these circumstances, your reasons for buying the land will be particularly important.

Due to the unique nature of this type of land, the loan calculations will include elements that wouldn’t normally apply.

A standard mortgage isn’t your only path to ownership either; some other common strategies for buying woodlands include:

• Using a commercial or agricultural mortgage.
• Buying woodland using your pension or SIPP.
• Refinancing another property to get a mortgage for the woodland.
• Purchasing woodlands with cash.

How finance for buying woodlands is calculated

This will largely depend on the size of the land and your plans. Typically, a smaller acreage of woodland, perhaps for conservation purposes, will be cheaper to buy, potentially opening up more financing options for you.

However, if your goal is to start a business or to build on it, you might need a bigger chunk of land. This could then require an agricultural or commercial mortgage, which involves its own specific pricing for finance and is calculated on a case-by-case basis.

Using a mortgage calculator

Due to these mortgages being bespoke and tailored to your plans, using a standard mortgage calculator for woodlands isn’t much use. You’d likely get a very rough idea of the costs and payments, but the final figures will probably end up being quite different.

There may be loan-to-value (LTV) caps of around 70% in place for some of these mortgages, meaning you’d need a 30% deposit (either based on the purchase price or current value). How much you can borrow to buy the land will largely depend on the income multiple lenders use. To show you what this could look like, here are a few examples of scenarios:

How to get a mortgage for woodlands or a forest

The exact process will depend on the exact plot of land you’re hoping to buy and what your goals are.

But, there are some universal steps that will help make sure you get the right mortgage and structure the finance in the best way possible:

Step one: gather your personal information and plot details

Like with any mortgage, you’ll need all your details on hand. This will include a photo ID, proof of address, bank statements, and information relating to your income (including whether you’re an employee or self-employed).

It’s also worth putting together details of your plans for the woodland or forest you’re looking to buy. If you have a particular plot in mind, make sure you’ve researched and have a basic idea about the costs. Or, if you want to set up a business on the land, create a clear business plan that lays out your goals and projections.

Step two: discuss your plans with an expert

Once you’ve got all your relevant pieces of information in one place, the next step is to discuss your options with a skilled advisor. By speaking with an expert broker at this stage, they can assess your plans and then instruct you on any areas needing clarity or improvement.

This means they can make sure you avoid any unnecessary rejections or marks on your credit file by ensuring you deal with the right lenders. Some lenders won’t be willing to offer mortgages for woodlands, and those that do will be particular about what they will accept. Using a specialist broker means speaking with the right lender from day one.

Step three: begin your application

Once your expert mortgage advisor has reviewed your plans and identified the most suitable lender to approach, they will help manage your residential or commercial finance application. The advantage of having an expert in your corner is that they can help look after things from start to finish.

So, once your application has been submitted to an appropriate lender, your broker can keep you updated throughout the process. This will ensure that you can concentrate on your upcoming property or business plans for the woodlands whilst they handle the finer details surrounding the mortgage.

Finding a knowledgeable and experienced mortgage broker can be difficult, which is why we offer a broker-matching service. The brokers we work with are experts in specialised areas of land ownership like this. Just make an enquiry.

Examples of lenders and interest rates

Typical interest rates for this type of borrowing can be between 1.5%-2% above the Bank of England base rate. However, your circumstances, the specific area of land you’re looking to buy, and how you plan to use the land will all impact the rates and terms available.

Most high-street lenders and banks won’t offer products, but here are some examples of lenders willing to discuss secure land loans and woodland mortgages:

• Ecology Building Society
• Shawbrook Bank
• Norton Finance

The mortgage structure you need will be specific to your plans and personal situation. So, if you want to see the full range of available options when buying woodland, your best option is to discuss your options with a specialist broker.

Refinancing a woodland mortgage

Remortgaging onto a better deal with your existing lender can be useful because they should have all the relevant details about the land. If you plan to refinance a woodland or forest you own, remember that most mortgages will have early repayment fees. So, make sure you check this before you make any changes.

However, it may be the case you want to do something different with the woodland. Or, there are now some new lending options that were not available when you originally took out a loan. An advisor who specialises in woodland mortgages can explain the current state of the market and direct you on whether it’s better to stay put or switch to another lender.

Speak with a woodland mortgage specialist.

This particular type of land ownership can be quite complex. Due to its niche nature, finding correct and reliable mortgage advice is difficult.

Luckily for you, we offer a broker-matching service. We can quickly assess your needs and the land you plan to buy. Then, we’ll pair you up with a specialist broker who has plenty of success securing mortgages for woodlands and forests.

Just call 0330 818 7026 or make an enquiry. We’ll set up a no-obligation introductory call with your ideal broker today.