Updated: March 01, 2022

Woodland Mortgages

Thinking about buying woodland and need a mortgage? There are lots of options! Find out which one will be the cheapest & most efficient for you in our guide.

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Pete Mugleston

Author: Pete Mugleston - Mortgage Expert

Updated: March 01, 2022

Owning a woodland is a dream for those who love camping and nature. It can also be a great investment, or the start of your own business.

While buying a woodland can be expensive — 2.76 acres of woodlands in Somerset costs £45,000 at time of writing — there are ways to make this more affordable. In this article, you’ll learn the different options available to finance your woodland investment, as well as how a specialist broker can help you make the right choice.

Can you get a mortgage for a woodland?

Yes! While woodlands are typically bought by cash buyers, it’s possible to get a mortgage to fund your purchase. However, woodland mortgages are a niche area of finance, so you will be restricted regarding which lenders you can borrow from.

Also, it depends on what you intend to use the woodland for. If you are planning to invest in a woodland as a business venture — perhaps to sell timber, or set up a forestry school — you may need an agricultural or commercial mortgage instead.

As woodland mortgages are such a niche, and often complex area of finance, most people in the market for them seek the help of specialist brokers to help them choose the right option.

Can you live in your woodland?

In short, no. Under government rules, you cannot build a permanent dwelling in your woodland, other than something basic like a tool shed. Also, you are only permitted to camp in your woods for a maximum of 28 days a year.

You may be able to get planning permission from the local council to build a house in your woodland, but this will be difficult. If you are buying woodland to live in it, understand that doing so may be tricky.

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How a broker can help you

Woodland mortgages are very specialised and few high street banks offer them. But an advisor who specialises in this area can help you find a mortgage, as the brokers we work with have access to the entire market, including specialist lenders for this type of purchase.

A woodland mortgage broker can offer you bespoke, expert advice to help you choose the right type of mortgage based on your financial situation and what you want to do with your woodland. They can also guide you through the application process and help with paperwork to save you time.

Our free broker-matching service will quickly assess your needs and circumstances to pair you with the right expert. Make an enquiry today to find your perfect mortgage advisor.

What are your options for woodland finance?

The right type of mortgage for you will depend on how much land you’re buying and for what purpose.

If you’re buying a small woodland for conservation or to own somewhere private to go camping, a woodland mortgage is a good option. Alternatively, because a smaller acreage will cost less, remortgaging your property or equity release might be more affordable.

If you’re hoping to start a business, you will need a larger area to make it commercially viable. You should consider a land, agricultural or commercial mortgage.

Keep in mind that there are mortgage brokers who specialise in woodland finance if you’re unsure which option to choose. They have the knowledge, experience and lender contacts to make sure you end up with the right finance for your needs.

Woodland mortgages

This product is generally aimed at someone wanting a small parcel of woodland to protect the environment. These woodlands can be used as a sanctuary, for recreation, or simply an investment.

Woodland mortgages are typically more expensive than residential ones, because it will take the lender longer to sell the woodland if it is repossessed. For instance, Ecology Building Society currently charges 6% interest on its woodland mortgage. It will lend up to four times your income and let you borrow up to 70% of the woodland’s value, so you will need a deposit of at least 30%.

Land or agricultural mortgages

If you’re planning to work the woodland, such as selling timber, a land or agricultural mortgage may be the right option.

Again, these mortgages usually come with higher interest rates, due to the difficulty of selling the land if repossessed.

Most land and agricultural mortgages typically have a loan-to-value (LTV) of 70% or less. Lenders will expect to see a business plan showing how you will make an income from the woodland. You’ll also need to show you have planning permission for your intended business, otherwise you may be offered a higher interest rate.

Commercial mortgage

A commercial mortgage is the right choice if you’re planning to build houses or a property like a supermarket on the land. Getting planning permission for commercial development on woodland is very difficult, but not impossible.

The LTV on commercial development mortgages is typically 75% or 80%, though can be higher. Most lenders will expect to see planning permission, a strong business plan, and an income forecast if you intend to rent out property.

Alternatives to a mortgage

Instead of getting a new mortgage, you could remortgage a property you already own and release equity to buy a woodland. This may work out cheaper, because interest rates on residential property are typically lower than for woodlands, but you will need to have built up enough equity in your property to cover the cost of the purchase.

Alternatively, you could buy woodland with your pension savings. It’s possible to purchase land or commercial property using your self-invested pension scheme, or SIPP. However, this depends on your SIPP provider and can be a complex transaction, so it’s highly recommended to speak to a financial advisor or mortgage broker for help.

Get matched with a woodland mortgage specialist today

With so many options to fund buying a woodland, it is in your interest to speak to a professional and get specific advice for your situation.

A woodland mortgage advisor can also save you money by getting you the best deal possible. We work with brokers experienced in securing mortgages for all types of property, including woodlands.

Call today on 0808 189 0463 or enquire online and we can organise an obligation-free chat between you and your ideal woodland mortgage broker today.

FAQs

Are there tax advantages to owning woodland?

Yes! Commercially managed woodland becomes free from inheritance tax if you own it for at least two years.

Also, timber sold from woodland is free from income tax and capital gains tax. Increases in the value of the land itself are still subject to capital gains tax.

Where can I buy woodland?

Woodland is available nationwide, and there are several websites listing available woods, including Woodlands and Wood4Sale.

Will you need planning permission?

No, but if you want to build a house you’ll need planning permission. You’ll also need permission to change the use of the land to something else like farming — although you are very unlikely to get it.

It will be easier to get the local authority’s permission to set up a business like a campsite. In some cases, you won’t need permission if you apply for an “exemption certificate” from an organisation like the Caravan and Motorhome Club, who can identify your woodland as a certified site.

If you are thinking of applying for an agricultural or commercial mortgage, you may need to get planning permission in advance.

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We know everyone's circumstances are different, that's why we work with mortgage brokers who are experts in all different Property Types. Ask us a question and we'll get the best expert to help.

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Pete Mugleston

Pete Mugleston

Mortgage Expert

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 OMA of course!

FCA Disclaimer

*Based on our research, the content contained in this article is accurate as of the most recent time of writing. Lender criteria and policies change regularly so speak to one of the advisors we work with to confirm the most accurate up to date information. The information on the site is not tailored advice to each individual reader, and as such does not constitute financial advice. All advisors working with us are fully qualified to provide mortgage advice and work only for firms that are authorised and regulated by the Financial Conduct Authority. They will offer any advice specific to you and your needs.

Some types of buy to let mortgages are not regulated by the FCA. Think carefully before securing other debts against your home. As a mortgage is secured against your home, it may be repossessed if you do not keep up with repayments on your mortgage. Equity released from your home will also be secured against it.

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