Land Mortgages: How to Finance Farmland, Paddocks and Development Land

A land mortgage is a loan secured on land rather than a building. Most high street lenders will not do them, but specialist lenders will. The type of land, its planning status and what you plan to do with it decide which lender and which product you need.

Land is harder to lend on than a house. It can be slow to sell, it may earn little or nothing, and its value can swing on a planning decision. Lenders price that in, so deposits are bigger and the right lender matters more.

This guide covers the types of land, what lenders check, deposits, development land and costs. For the bigger picture, see our commercial mortgage guide.

Can you get a mortgage on land?

Yes, from specialist lenders. Farmland that makes an income is the easiest to finance, often with a 30% to 40% deposit. Paddocks and amenity land usually need 40% to 50%. Land bought in the hope of getting planning is the hardest, and lenders may only lend 50% or less. Land with planning permission is usually financed with bridging and then development finance.

What are the types of land and the usual routes?

Land	Usual finance	Typical deposit
Farmland	Agricultural mortgage, often long term	30% to 40%
Paddock or amenity land	Specialist land loan or bridging	40% to 50%
Land with planning permission	Bridging, then development finance	30% to 50%
Land without planning	Bridging, with a low loan-to-value	50% or more
Woodland	Specialist lenders only	40% or more

Which situations do lenders see most?

These are illustrative situations, not Option Finance client outcomes.

What do lenders look at?

• Use and income: farmland making an income, or land let to a farmer, is easier to finance.
• Planning: outline or full permission can add a lot of value. GOV.UK explains when you need it in its planning permission guide.
• Access and services: road access, water and power.
• Title: the boundaries, rights of way and any restrictions. You can check the title through HM Land Registry.
• Your plans and experience: farming, building or equestrian use.
• Your exit: for short-term loans, how you will repay.

How do you finance development land?

If you are buying land to build on, lenders look at the planning permission, your build costs and the value once finished. Most developers buy with bridging and move to development finance for the build. See our development finance guide, bridging loan guide and self-build mortgage guide.

What costs should you plan for?

• Stamp Duty: land that is not part of a home’s garden or grounds is charged non-residential rates in England and Northern Ireland: 0% up to £150,000, 2% to £250,000 and 5% above. On £400,000 that is about £9,500. Land sold with a house, such as a cottage with fields, is charged residential rates. See GOV.UK’s non-residential rates.
• Valuation by a surveyor who knows land
• Arrangement and legal fees, including searches on access and rights of way
• Planning costs if you are applying for permission

Frequently asked questions

Speak to Option Finance about your land purchase

Tell us about the land, the price and what you plan to do with it. We will tell you straight which lenders are realistic and how to plan the route from purchase to build or refinance.

Book a free initial consultation using the enquiry form below. See also our commercial mortgage advice and bridging finance advice.