Part-residential

We provide mortgages for sustainable enterprises, organic farms or small holdings, and part-residential businesses

Our part-residential mortgages are available for those who:
• Want to create a new ecological place to live and to house the business
• Already run a sustainable enterprise from home
• Manage and live on an organic farm or smallholding
• Want to purchase an organic farm or additional land for expansion where a residential dwelling is present*
• Have existing part-residential businesses and want to build additional facilities such as roadside shops
• Want to build residential accommodation on an existing organic farm, even when agricultural restrictions apply
• Run part-residential businesses where organic certification has been granted or applied for

*where no residential dwelling is present, we can still consider lending, although your requirements will be considered under our mortgage for sustainable business

Please note that we don’t provide loans for the start-up of new businesses and we need to see the last three years’ accounts of your business, or the business you are purchasing.

For mortgages secured on properties of mixed use that are not reliant on commercial activities undertaken on the land or premises to service your repayments, please refer to our residential mortgages information.

Our Part-residential mortgage is not regulated by the Financial Conduct Authority.


Key Features

  • We offer a straightforward, tailored approach to financing your part-residential project
  • Each application is assessed individually and a site visit may be arranged with you to discuss your project, where appropriate
  • We can consider lending up to four times joint or sole income subject to loan-to-value. This income multiple is only intended as a guideline – our final decision on how much we lend will be based on our overall affordability assessment
  • Our current Variable Rate for part-residential mortgages is 5.50%
  • We reward energy efficient homes that meet specific Energy Standards with our C-Change discounts (C-Change sustainable homes, C-Change retrofit or C-Change energy improvements)
  • Mortgages are available on a capital and interest repayment basis, however interest-only periods are negotiable to support new developments and refurbishment stages for existing homes and business premises
  • Mortgage terms are available from 10 to 25 years, subject to eligibility
  • You can borrow up to 80% of the property’s value where a residential property is present, subject to eligibility
  • We will consider lending funds up front on land or the unimproved value of a building with outline planning consent
  • Stage release payments are available as the value of property increases via building or renovation work, but are subject to our maximum loan-to-value at any given time
  • An early repayment charge may be payable if you repay all or part of your mortgage within the first two years.

    Our Part-residential mortgage is not regulated by the Financial Conduct Authority.
 
What we lend on

We have supported a wide range of borrowers with part-residential mortgages, including architects, environmental consultants, garden nurseries and organic farms. We recognise that properties that carry mixed use planning consents or restrictive covenants such as agricultural ties can present challenges to some lenders, but we believe that running a business from home represents a low-impact approach.

We don't have a 'tick box' approach to assessing projects –in many instances, we'll welcome projects that standard lenders reject. We will consider:

  • Live/work units
  • Timber frame/clad or steel frame
  • Earth sheltered dwellings
  • Non-traditional constructions, such as straw bale, thatch, rammed earth, and wattle and daub
  • Structured insulated panels
  • Insulated concrete forms

For new build projects, homes need to achieve an A rating under the Energy Performance Certificate (EPC) scheme for us to consider lending, see other Energy Standards we accept below.

If you are intending to undertake renovation or conversion work as part of your plans, we will expect the measures you propose to meet our ecological standards via the use of energy efficient measures and sustainable materials.

Our mortgages are available across England, Scotland, Wales and Northern Ireland.

 

Further reading
ANY HOME OR PROPERTY GIVEN AS SECURITY MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE OR OTHER DEBTS SECURED ON IT

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Ecology Building Society was rated as an ethical Best Buy for our mortgages and savings accounts by Ethical Consumer magazine in its product guide rankings (July/August 2016 issue).

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C-Change discounts explained

As a building society with a unique mission to build a greener society, we only lend on projects and properties that support our aims through their reduced impact on our environment. Making your home energy efficient is a major way you can support tackling climate change – while saving on your energy bills. We reward borrowers whose properties are energy efficient, and therefore have lower C02 emissions, and help them save money on their mortgages with our C-Change discounts. We call our discounts ‘C-Change discounts’ simply because we’re aiming to make a ‘sea-change’ of difference to our climate with each property or project we fund.

The level of our C-Change sustainable homes, C-Change retrofit or C-Change energy improvements discount that applies is based on the Energy Standard rating achieved on the self-build, renovation, conversion or energy improvements when the work is completed. The discount is applied from the date we receive evidence that the work has been completed and the required Energy Standard rating has been achieved.

When your project is complete

For us to apply the applicable C-Change sustainable homes, C-Change retrofit or C-Change energy improvements discount, once your build, renovation or conversion is complete you need to provide an Energy Performance Certificate and an Architect’s or Building Control sign off of works if applicable.

The discount is only applied to our Variable Rate when we receive evidence that the work has been completed and the Energy Standard rating required has been achieved.

How we work out your Variable Mortgage Rate:
Our Variable Rate minus C-Change discount = Variable Mortgage Rate
Energy standard
For new build projects eligible for the C-Change for Sustainable Homes discount RatingsVariable RateDiscount %Variable Mortgage Rate
PassivhausPassivhaus5.50%1.25% 4.25%
Energy Performance Certificate (EPC)A or above5.50%0.75% 4.75%
Code for Sustainable Homes (CSH)Code Level 45.50%0.75% 4.75%
Code for Sustainable Homes (CSH)Code Level 55.50%1.00% 4.50%
Code for Sustainable Homes (CSH)Code Level 65.50%1.25% 4.25%
Association for Environment Conscious Building (AECB)Silver5.50%0.75% 4.75%
Association for Environment Conscious Building (AECB)Gold5.50%1.25% 4.25%
C-Change Retrofit (for whole house renovations)RatingsVariable RateDiscount %Variable Mortgage Rate
Energy performance Certification for retrofit projects (EPC)

EPC rating improvement
5.50%0.25% for each improvement in EPC rating 4.00%-5.25%
C-Change Energy Improvement discountRatingsVariable RateDiscount %Variable Mortgage Rate
For specific energy improvement worksEvidenced via invoices and our C-Change energy improvement checklist5.50%A 1.00% discount is applied on funds borrowed specifically for qualifying energy improvement works (see C-Change energy improvement checklist)4.50% on funds borrowed specifically for qualifying energy improvement
works

5.50% for funds borrowed
that are not related to qualifying energy improvement works
to the property
Our fees

Our fees and charges:

  • A non-refundable mortgage application fee of 0.25% of the sum applied for is payable on submitting a formal application
  • An offer acceptance fee of 0.50% of the sum approved is payable on acceptance of a formal mortgage offer from us
  • We will agree a valuation fee with you using a local qualified chartered surveyor. Payment of the fee agreed will be required from you in advance of the Society formally instructing the surveyor to undertake a valuation report
  • An early repayment charge may be payable if you repay all or part of your mortgage within the first two years.

Our service, fees, tariffs and charges

The Society reserves the right to amend existing services and charges, or to introduce new ones.

Any change to charges will only reflect the increased operational costs of providing the service. You will always be notified before any changes are implemented.

For further details and tariff information please see our current Commercial rates and charges leaflet.

 

Part Residential FAQs

Do we need to provide planning permission for a new build development?

Yes. We need at least outline planning permission to start the application process and detailed planning permission before the mortgage is released.

What information do we need to progress a mortgage application?

You’ll need to have a specific project in mind which needs to be supported by detailed plans, including a breakdown of material and labour costs and an indication of the energy standard you are building or renovating to. We will also ask for recent financial accounts and bank statements where appropriate, along with financial projections to show how your project will service your mortgage repayments and other ongoing financial commitments.

What deposit do we need for my mortgage?

You need a minimum deposit of 20% of the purchase price or value of the property(ies) being mortgaged, whichever is the lower.

Do we still need a deposit if we already own the land and have planning permission?

No, you don’t always need a deposit; we can lend based on the value of your land or property, providing you already own the land and it’s mortgage-free. Also, if you need us to, we can help you repay any outstanding finance on the land.

How much will our mortgage cost a month?

As soon as we know that we can help, we’ll provide you with an indicative illustration, showing how much your monthly repayment will be for the amount you want to borrow, over the term you require

How long do we have to complete the build or renovation?

Subject to planning constraints, we allow a maximum of 2 years for you to complete the build or renovation, although we encourage you to complete earlier to benefit from our C-Change sustainable homes or C-Change retrofit discount which is applied to the Variable Rate from the date we receive evidence that both the work has been completed and the Energy Standard rating required has been achieved.

Do you offer stage payments?

Yes, although we do not release payments at set construction milestone stages (e.g. foundation, wall plate etc.). We release funds as and when the build progresses and release up to a percentage of the increased value of the property.

Can we have interest-only during the build or renovation phase?

Yes, we can offer an interest-only period during the construction or renovation phase subject to an acceptable repayment vehicle.

Does Ecology require a particular build warranty on completion of my project?

A build warranty is not a mandatory lending requirement of our mortgage and we are happy with a Building Regulation Completion Certificate. However, if you wish to take out a build warranty for the completion of the property then this is acceptable to the Society.

Do we need to have been established for a minimum period before you will lend to us?

Yes, we need to see the last three years’ accounts for your business, or the business you are purchasing.

How to apply

Because we take an individual approach to every mortgage, we like to discuss your project with you before you make a formal application, to make sure it fits our criteria and to answer any questions you have.

You can contact our Business Development Manager on 01535 650 774, or email [email protected] or write to the Society. When you get in touch with us, it’s helpful if you can provide us with some basic information about your project:
• what you want to do (especially the environmental aspects of your project)
• how much you’ll need to borrow
• your financial history and forecasts to show how your project will be able to service your mortgage repayments and other ongoing financial commitments.