Every lender has different criteria for the types of property they’re willing to lend on.
Many regard anything that deviates from a conventionally built home - made from brick or stone walls, concrete foundations and a tiled roof - as ‘non-standard’ and will consider it to be a higher risk to lend on.
But although it may prove a little more difficult to find a lender, there are providers who will offer a mortgage on a home that’s of non-standard construction.
You may need to enlist the help of a specialist mortgage broker who knows the market and which lenders are more likely to approve a mortgage on an unusual property.
Mortgage providers may be more cautious to lend on a home that’s a little out of the ordinary. So, if you’ve set your sights on an unusual home that’s not of standard construction, you’ll likely find that your choices are limited.
Most UK homes are constructed from brick or stone with a tile or slate roof. These are regarded as of standard construction.
Any property that’s made from more unusual or unconventional materials will be classed as of non-standard construction by many mortgage providers. This includes cob, wattle and daub, straw bale or concrete, for example.
Homes with thatched roofs, steel or timber-framed houses, prefabricated homes and listed buildings also come under this category.
From the point of view of the mortgage provider, an unusual home can come with complications. That’s why some flat out refuse mortgage applications on them, they’re too much of a risk.
Those that do consider lending on non-standard properties will need to feel satisfied that their investment is a good one.
If you default on your mortgage payments and they need to repossess your home, they want to be confident that the resale value of the property is at least enough to get their money back.
Other factors they’ll take into consideration include:
Some providers will be hesitant to lend because unusual builds can be more difficult to resell. There’s less of a market out there for homes that come with certain quirks, possible complications or that cost a lot to maintain.
Certain types of home - such as thatched-roof properties - need regular, expensive maintenance and even total roof replacement after a period of time. Similarly, unusual properties like listed buildings or glass-walled homes require costly building materials and specialist tradespeople for renovations or repairs. The lender might see these high costs as a threat to the homeowner’s ability to afford repayments.
If a homeowner fails to keep up with maintenance, it can mean the property’s value falls.
Depending on the type of building you're looking to buy, lenders may be concerned about the structural integrity of a non-standard construction property and the risk of future problems.
It can also be difficult to get buildings insurance policies on unusual homes. Many providers require you to have this type of insurance in place as a condition of the mortgage.
It will depend on the results of the structural survey and the lender’s valuation as to whether they’ll choose to grant you a mortgage.
In some cases, where a survey has identified work that needs to be done, they’ll put a retainer on the mortgage. This means they hold back some of the funds and only release the full mortgage amount when the work has been carried out.
There are all sorts of construction quirks, materials and types of home that can fall into the non-standard category, including:
If a lender does approve your application, there may be caveats. They could ask for a bigger deposit and charge you a higher rate of interest in order to balance out the risk of lending.
There are some properties you can’t get a mortgage on at all. These include park homes and static caravans where the land they stand on belongs to the site owner.
You either need to buy these properties outright with cash, engage in a part-exchange scheme or take out a specialist loan.
If you’re thinking of buying a property of non-standard construction you should be aware that, in some cases, you’ll have less mortgage lenders to choose from and therefore fewer competitive deals.
The same goes for insuring your property. There won’t be as many insurers willing to cover you and premiums may be higher because repairing or replacing parts of your home is likely to be more complicated, time-consuming, expensive and will require specialist tradespeople.
Also, bear in mind that it might be difficult to resell when the time comes. Plus, if mortgage lending criteria changes and becomes stricter, a prospective buyer might find it even more difficult to get a loan on an unusual property.
All that said, a home that’s out of the ordinary can be a wonderful and unique place to live and enjoy. And if you ensure that the property is structurally sound with an in-depth survey, you should be able to secure a mortgage deal.