Last reviewed on 21st July 2023 by Martin Alexander (Mortgage Advisor)
Converting a barn into a home is a dream for many, but getting a mortgage for a barn conversion can be difficult.
Lenders for barn conversions are limited when compared to regular residential mortgages. Furthermore, mortgages for conversions of any kind are considered a niche type of finance. As a result, proposals are assessed on a case-by-case basis.
The good news is that you can prepare your application to meet a lender’s requirements. Speaking to an advisor can also help you to achieve this.
How to get a barn conversion mortgage
Getting a mortgage for a barn conversion requires a lot more than a regular mortgage. This is because you’re converting the building rather than moving straight in. This is why lenders need to be sure that your conversion is viable.
When applying for a barn conversion mortgage, key points to consider are:
- Whether you’ll need planning permission
- Check for any agricultural restrictions
- Ensuring there is a clear right of way
- Is the property a listed building?
- Plan and budget for unforeseen costs
Will I need planning permission for a barn conversion?
You may be surprised to learn that you don’t always need full planning permission for a barn conversion. Permitted development rights allow agricultural buildings to be converted into homes without applying for planning permission.
Although planning permission isn’t always required, you’ll still need to give prior notification to your local authority before you start any conversion work.
This is because your local authority can refuse your proposal if your conversion doesn’t meet certain conditions. Your solicitor will check this during your conveyancing, but you should resolve any potential issues before you get to this stage.
When is full planning permission required?
If you’re rebuilding your barn rather than converting it, you’ll likely need full planning permission. Furthermore, you’ll need a self-build mortgage rather than a mortgage for a barn conversion. Permitted development rights only apply to conversions rather than complete rebuilds.
You’ll undoubtedly consult an architect to help you with your project. They’ll also inform you of whether you’ll need planning permission.
Can I get a mortgage for a barn that has agricultural restrictions?
The short answer is no. If your barn has any agricultural restrictions, then it will be difficult to find a lender.
Removing agricultural restrictions can take a long time, and there’s no guarantee you’ll be successful in doing so. Furthermore, the process can be costly. This is why it’s often recommended to avoid barns with restrictions.
Do I need a clear right of way?
Lenders for barn conversions will require a clear right of way to your proposed building. Ensure your architect includes this in your plans before formally applying for a mortgage.
You may find that you’ll need permission to make changes so that you have a clear right of way. Nonetheless, doing so will significantly improve your chances of getting a mortgage. If you wait until a lender points this out, you could be waiting months before your local authority approves, and that’s if they approve.
Can I get a mortgage for a barn conversion on a listed building?
Getting finance for a barn conversion on a listed building can be difficult and very time-consuming. For instance, your barn will have a particular set of rules which outline what you can and can’t do. Trying to change these rules can be very difficult.
If you find yourself in this position, you must apply to your local authority for listed building consent. Your application should include architectural drawings of your proposal. You’ll want to do this before applying for a mortgage.
How much does a barn conversion cost?
With any property conversion, having a contingency plan is a must. Predicting costs can often be difficult, but budgeting for unforeseen issues is always recommended. More often than not, certain aspects of conversions can be overlooked.
Lenders for barn conversions will also check whether you have enough funds for additional costs. They’ll do this by assessing your schedule of work and whether your budget is realistic.
If lenders feel you’ve underestimated your costs, you may have to borrow more than you initially applied for.
What type of mortgage will I need for a barn conversion?
Mortgages for barn conversions can vary quite considerably. Depending on the nature of your project, you may benefit from the following types of finance:
- Bridging loan
- Development finance
- Self-build mortgage
- Residential mortgage
You’ll struggle to get a regular mortgage if your barn is uninhabitable. This is because regular mortgages are for properties you can move straight into. As a result, a bridging loan may be a better alternative.
A bridging loan can give you the funds to buy and convert your barn into a home. You’ll then be able to get a residential mortgage for your barn and, at the same time, repay your bridging loan.
Read more: How to get a bridging loan
Development finance may be better suited than a mortgage if:
- Your barn conversion is an extensive project
- You plan on knocking your existing barn down
- If you plan on multiple conversions or developments
- You’re extending your barn in addition to a conversion
Learn more: What is development finance?
Self-build mortgages are often used to build rather than convert a building. If you aim to build most of your property from the ground up, a self-build mortgage may be better suited.
Funds for self-build mortgages are released in stages. Your lender will check each stage of your build to ensure it meets their requirements before releasing further funds.
Read more: How to get a self-build mortgage
If you’re already living in your barn conversion and it’s habitable, you may qualify for a residential mortgage. You may have purchased your barn using cash or used a different method of finance to buy your property.
Getting a residential mortgage to buy a converted barn isn’t always easy. This is because lenders prefer more traditional building materials such as brick. If your barn consists mainly of wood, you may struggle.
Starting your mortgage application
There’s a lot to think about when beginning your barn conversion journey. It all starts with getting the right financial product in place. This will give you the confidence and direction to start your project.
Now you know what’s involved, speak to an advisor who can guide you further. Each conversion requires a different plan, so lenders assess cases individually.
An advisor can then assess your criteria and work to find you a mortgage. You’ll then be able to calculate the rates involved to check whether a barn conversion is indeed a viable proposition.
About the author
Martin is a senior mortgage advisor and has held a CeMAP qualification for over 15 years while also completing an MBA in Global Banking & Finance.