Getting a Self-Build Mortgage in Scotland

If you are looking to build your own home in Scotland, you may want a mortgage to help fund the construction. Read more here.

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Home Self Build Getting A Self-Build Mortgage In Scotland
Pete Mugleston

Author: Pete Mugleston

Mortgage Advisor, MD

Updated: March 15, 2024

If you want to build on land you own in Scotland, you may need to borrow money to fund the construction. Here, we look at whether self-build mortgage products are available for this purpose and if they differ from similar loans in the rest of the UK.

We also identify how best to secure this type of mortgage, which lenders could be potential providers, and if the Help to Build scheme could be an option for you.

Are self-build mortgages available in Scotland?

Yes, they are. However, you may find that the market is smaller than the rest of the UK, giving you access to fewer lenders offering this type of lending. That can impact how much you can borrow because you’ll have less options available, so you may have to accept a product with a higher rate.

Additionally, while not an issue limited to self-build mortgages, many providers have postcode restrictions in Scotland, which can further reduce the number of lenders available to you.

A broker can help identify all possible providers, so you have a wider final selection from which to choose.

Maximise your chance of approval with a dedicated specialist broker

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Do they work any differently?

No – though each lender will have a slightly different set of terms and conditions as part of their mortgage agreement. Differences could be:

  • How they confirm each stage of your build to release further funding
  • At what stages they release more funds
  • Maximum loan amounts or LTV ratios

Additional eligibility requirements

For the most part, lenders will need you to meet standard mortgage application criteria such as age and credit score in addition to passing affordability assessments.

However, these mortgages (in Scotland and the UK) will likely come with the following criteria too:

  • Land ownership - You need to prove land ownership so that lenders know your mortgage is to fund construction costs only. Providers rarely allow funds to be used to purchase land you want to build on.
  • Building purpose - Lenders usually want self-build mortgages to be for residential homes intended for an applicant or their immediate family.
  • Construction type - Lenders may put restrictions on what type of property is allowed. For instance, some may not want a property to have a timber frame.
  • Proof of qualifications - You may need to show your lender your construction qualifications or your contractor’s.
  • SAP rating - Increasingly, lenders want to see a minimum Standard Operating Procedure which is a rating architects use to make sure a house reaches a certain EPC (Energy Performance Certificate) level.

How to get a self-build mortgage in Scotland

Step one should be to speak to a self-build mortgage broker who specialises in the Scottish market. Make an enquiry with us and we will match you with the right broker for free.

Your handpicked self-build mortgage broker will guide you through the following steps:

We're so confident in our service, we guarantee it.

We know it's important for you to have complete confidence in our service, and trust that you're getting the best chance of mortgage approval at the best available rate. We guarantee to get your mortgage approved where others can't - or we'll give you £100*

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Which lenders are available?

The Scottish Building Society, Mansfield Building Society and the Newcastle Building Society could all be options for a self-build mortgage in Scotland. However, they will have their own specific eligibility criteria which you may or not meet, plus there are other lenders that could be an option for you too. Seeking the help of a broker is, therefore, advisable as their depth of knowledge will be able to identify the most suitable lender for your needs.

Can you use the Help to Build scheme?

Yes, if you are eligible.

That means you will need to show that you:

  • Cannot access standard bank lending which covers your construction expenses
  • Own land to build on or at least have a contract to buy a plot of land
  • Have planning permission and a build warrant in place which will allow work to start.

The Scotland Self-Build Loan Fund is open for up to five years and extends loans to eligible applicants of up to £175,000 to help fund the construction of self-build projects. Those projects can be in both urban and rural areas. These loans cannot be used to purchase the land itself.

Speak to a self-build mortgage specialist in Scotland

While getting approved on your own for this type of mortgage is possible, seeking the help of an expert based in Scotland could prove invaluable. Not only can it make the application process easier and quicker, a specialist can also advise on the best lender for you.

That’s important as, with their help, you can ensure you borrow the amount you need despite the smaller range of options, with the best rates you are eligible for. As a result, you minimise your monthly outgoings and make your mortgage repayments more affordable.

Our free, no-obligation broker matching service will connect you with the best self-build mortgage specialist for you. Call us on 0808 189 2301 or enquire with us today so we can put you in touch.

FAQs

Yes. Planning permission from your local council is required. Their approval will depend on:

  • what you are building,
  • what it is going to be used for,
  • the potential size and look of the new building,
  • the impact on the local roads, water supply, and other infrastructure,
  • the impact on the environment,
  • if any landscaping is needed.

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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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