You’ve done the hard bit and found your dream building plot. So what’s next? Here’s what you need to know before you commit to buying a building plot.

Too good to be true? – Do your homework

The first thing you must do is be sure that this plot is actually what you think it is. Instead of looking at the plot for all that it could be, you first must look at it for what it currently is. This means making a note of things like the boundaries of the site, access, trees and plant growth, overhead cables and services. It may be worth conducting a soil test as the ground conditions could affect foundation design as well as identify any ground contamination. Doing a desktop check on environmental matters such as flood risk, radon presence, bedrock levels etc. could be an exercise well worth carrying out.

It might seem like these are pretty obvious things to consider when buying a plot but it is often the case that stuff like is overlooked in amongst all the excitement of finding the perfect location. Any discrepancies in the description of the plot and what you actually find yourself can be used in the negations of the sale, potentially fattening up your build budget further down the line. It’s worth commissioning an independent survey and plot assessment by a professional.

If there is anything already present on the site (a habitable or dilapidated house for example) then costs of demolition including the removal of the demolished building and the impact it will have on the quality of the plot need to be considered. The demolition of an existing building could affect the ground stability and you need to consider the cost to remedy this.

Planning permission

Planning Permission is another thing to do plenty of homework on. Yes, your dream plot might well have planning on it already but you’ve got to read the fine print. Why? Because your lenders, lawyers and new neighbours will. Lenders will be hesitant to help you out if the planning permission has six months or less to run. Equally, if the planning permission of the plot comes with 100 asterisks then it will make lenders question your ability to get them their money back. It’s worth checking if the site has a planning history as this information could throw up some alarm bells but equally could help you with your planning application.

Where planning conditions are little foggy, make sure you understand them before going ahead with the purchase. It might be worth purchasing with the condition that you get fresh planning permission secured on the property you want to build.

Remember if you are looking to replace a dwelling, then it must be currently habitable to retain its planning status. If you are looking to build something bigger than what is already there, make sure you have permission to do so.

Show me the money

Most of us will need the help of a lender to secure the plot of our dreams. Now, when you are buying a house this process is relatively straight forward. The lender has something they can put a number on and can feel confident that their money is secure. However, plots are all about potential and lenders can find it a bit tough to put a number on potential.

The monetary value that can be assigned to planning permission is short lived. Lenders only feel confident in giving you the full amount when all the hurdles of planning have been crossed.  foundations are starting to go in. Until then it is likely a lender, especially if it is a bank, will reduce their one hundred percent confidence down to something like sixty to eighty percent of the plots value. This lower amount will also likely need to be repaid by the end of the planning permission expiry window or a guarantee that the project will start by a certain date.

The best way to negotiate lending when it comes to plot purchasing is to have your planning permission cleared up early on. The more clear and precise the planning permission the more likely it is a lender will have the confidence they need to help fund your venture.

Specialist self build lenders will have a greater understanding of the peculiar world of plot purchasing so will likely provide a more lenient service. To negotiate this market of self build mortgages you might want to get in touch with a broker with experience in the field. They will be able to help you arrive at the best product to cover your circumstances.

Show me your money – Mortgage checklist

It’s one thing to get a lender to believe in your building plot, it’s another thing getting them to believe in you. Lenders are going to want to know about you, your plans and your financial situation before they part with their money. This is where a clear plan can come in handy.

Planning permission doesn’t tell the whole story of your project. In order to satisfy a mortgage lender, you are going to need details of the plot. You will also need its planning approval and drawings that come with it. You will also need to have a pretty clear outline of what you are going to use in your build. This includes information about the type of materials you are going to use (bricks, timber or structural frame technology). Also the way you are going to manage them (project manager, contractor, yourself).

A detailed costing of the total build will also be requested so be sure to do your homework. Lenders will also need to know how the cash will flow during your project. Different stages of a build cost different amounts so being aware of these hurdles will be important if you are to secure your mortgage.

Finally, the lenders will want to know how you are doing financially. This is the Same as they would if you were purchasing a regular house mortgage. Clearly indicating that you can begin repayments and keep up with them will make the whole process a lot smoother.

The Deal – The last leg of the journey

Land value is usually calculated by subtracting the indicative design and build costs from the anticipated market value. What you are left with should be the very maximum you should pay for a plot.

Now it’s time to do the deal. Just like a regular house purchase, there is a bit of back and forward to go through. This will happen until the deal crosses the line. With everyone’s situations needing to be perfect before the deal can go through, land buying can often feel like you are waiting for the stars to align. This is often exasperated when the plot is a popular one. It can take as long as 20 weeks to negotiate the final terms of a purchase. This increases especially if there are lenders involved.

What if you are facing uncertainty around the planning and your lender is not willing to support the project? They may need further clarity? It is possible to put an option on the plot until clearer planning is granted. However, this will most likely come with a holding fee. This will cover the time needed to obtain the new planning consent.

The most popular plots will receive a flurry of bids. To sort this out, the owners may use a process known as a sealed bid. This is basically a process of making everyone hand in their bids by a given date. Following this, they then picking their favourite.

Physical and legal site inspection

Once your bid has been accepted you will move into the ‘Under Offer’ category. Here, you will want to have a lawyer go over what is known as the Conveyance Process. This is basically a thorough inspection of the site, both physically and legally. Lawyers will likely carry out searches on your behalf, checking for things like services and geographical concerns. These are not absolute checks but are simply tools used to provide assurances for you and your lender.

The one big thing here is the legal inspection the Lawyer will do on the plot. Most pieces of land come with a long thread of legal history, covenants and complications. Simply purchasing a plot doesn’t guarantee your right to build on it. This is what this inspection will hopefully reveal to you. Any issues surrounding deeds and titles will likely be made clear during this process. This will give you and your lender the peace of mind you both need to commit to the purchase.

Insure and secure – What to do now the plot is yours

Finally, you’ve done it. After all those months (maybe even years) of searching, you now have somewhere to begin building. But, before building starts, you might want to make sure that this empty site is secure. This means putting up fences where needed and ensuring that any services connected to the property are shut off. You will need to insure the plot as well. Public Liability is a good place to start. An empty site might be tempting place for dog walkers and curious children. Any injuries on your site can come back to haunt you. You must be be insured, even if the person who got injured wasn’t supposed to be there.

Find more plot finding advice from our team of experts here or visit Build It magazine’s website