Buy to let

farmerm

Member
Location
Shropshire
Anyone out there using an AMC type of loan against your land to fund buy to let property purchases rather than take up a buy to let mortgages?

Is buy to let going to even be feasible in the future, given how it seems the government is doing its best to destroy the sector for the small scale investor? Given how Mr Osborn is targeting buy to let you would almost think he was a Labour chancellor!
 

farmerm

Member
Location
Shropshire
"
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What can I borrow for?

You can borrow for any business purpose as long as your mortgage is secured on a house, agricultural land and/or buildings."

BTL would surely be a business purpose
 

Sheepykid

Member
"View attachment 276464 What can I borrow for?

You can borrow for any business purpose as long as your mortgage is secured on a house, agricultural land and/or buildings."

BTL would surely be a business purpose
Yeah you might be okay then. Only one way to find out. I don't think they class buy to let as 'safe' lending like farm lending. But nevertheless if it's secured on your farm you can spend it on anything I guess.
 
Location
Cheshire
Yeah you might be okay then. Only one way to find out. I don't think they class buy to let as 'safe' lending like farm lending. But nevertheless if it's secured on your farm you can spend it on anything I guess.

You have to lie, they won't agree the tiniest of overdrafts for such spending. If you had a balance that you were using in combination with a small OD for such a venture and they said "no". Then why should you not demand to know what they are doing with the balance and if you don't like the answer or they won't tell you, then tell them where to go when it comes to using your money!
 

farmerm

Member
Location
Shropshire
I Iooked at this firm for our mortgage years ago.
Glad I went with the then Midland bank instead as their terms would have crippled us ?
Its doesnt have to be an AMC loan. Im just looking at the priciple of realsing equity held in land to purchase other asests, in this case a buy to let property...
 
Location
Cheshire
....and why would you do it if they weren't? It is based on the interest only payment.

Lenders generally look at houses as safer assets than commercial property. If you borrow against the land, the serviceability is now being assessed against the farm rather than the BTL property, so it is a higher risk.

I always thought farm debt was safer than houses, as generally the levels of collateral are much greater.
 

farmerm

Member
Location
Shropshire
One advantage of BTL houses is that selling the odd one or two if circumstances dictate is much earier than breaking up a block of farmland.
Agreed. We have buildings in the yard that could be converted to houses, but for the same level of investment that would be required, BTL offers a better return and a more liquid asset. I dont fancy having to sell and loose control of an asset that is located in the centre of my business.

I always thought farm debt was safer than houses, as generally the levels of collateral are much greater.
afterall we are only talking borrowing against 5% of the land value, that has to be a safer bet for a lender than 80% of a house.
 
Agreed. We have buildings in the yard that could be converted to houses, but for the same level of investment that would be required, BTL offers a better return and a more liquid asset. I dont fancy having to sell and loose control of an asset that is located in the centre of my business.

afterall we are only talking borrowing against 5% of the land value, that has to be a safer bet for a lender than 80% of a house.

Also there are always suitable houses coming on the market - the same cannot be said for land, at least not around here.
 

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Red Tractor drops launch of green farming scheme amid anger from farmers

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quote: “Red Tractor has confirmed it is dropping plans to launch its green farming assurance standard in April“

read the TFF thread here: https://thefarmingforum.co.uk/index.php?threads/gfc-was-to-go-ahead-now-not-going-ahead.405234/
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