Lenders offering section 106 mortgages
It is possible to get Section 106 mortgages on properties with agricultural restrictive covenants or planning restriction limits.
Some banks and building societies will cap the amount you can borrow while others state the only acceptable Agricultural tie is where the applicant is employed in an agriculture-related job and the primary source of income is not related to the secured property.
One of the larger banks can potentially lend on properties that have a Section 106 restrictive covenant. It states that the range of reasons it accepts is varied but may include:
- Limiting occupation to a certain category of the occupant - local residents, first-time buyers, specified age requirement, specified employment types
- Restricting the use of the property - tied to agricultural use, restricting residential occupation to certain time limits, for example, 12 months of the year.
Broadly speaking, restrictions that mean a property must be used for agricultural use will be unacceptable. However, some smaller building societies may lend a reduced loan amount.
Banks and building societies use property valuers to determine the impact on the suitability of the property for lending. The conveyancer will determine whether the purchaser/owner complies with the obligation, advising the bank of any issues that may impact the lending.
When the restriction limits the time a property can be occupied, it may only be possible to get a holiday home or second home mortgage. Again, this is subject to the valuer confirming the property is suitable for lending.
Aaron Strutt, product director at Trinty Financial, says: "While Section 106's can be a real problem for some lenders, others are more open to them.
"If you are planning to buy a larger property with lots of land, it may be better to approach a specialist provider and our brokers can help with this."
Call Trinity Financial on 020 7016 0790 to secure a mortgage or book a consultation
The actual rate available will depend on your circumstances. Please ask for a personalised mortgage illustration.
Your mortgage is secured on your property. Your property may be repossessed if you do not keep up repayments on your mortgage
A Section 106 (S106) is a legally binding agreement or planning obligation between a local planning authority and a property owner.
S106 agreements are used to mitigate the impact of the development on the local community and infrastructure.
It will set out terms binding on the owners or developer to provide, arrange or fund the provision of infrastructure, services or other measures that might be needed for the development to be acceptable in planning terms.
Get started today
Speak to one of our mortgage experts. Book an appointment to come and see us or request one of our experts to call you.
