Guide to mortgages for homes with unusual construction
Non-traditional construction covers various types of homes, ranging from glass to concrete to timber-frame.
- Unusual construction could include a number of building types, such as concrete pre-fabs, glass, metal frames, thatched roofs and much more
- With unusually constructed buildings, lenders may be worried about future value or the risk of buildings getting damaged
- They may ask for a large deposit and you might not be able to access competitive rates
While some of these styles are accepted by mortgage lenders, some may cause issues for buyers when it comes to taking out a mortgage.
Certain types of homes are more likely to be classed as 'of unusual construction' - many council houses in the 1950s and '60s were prefabricated or built with concrete.
While unusual homes may represent a bargain for cash-buyers or buy-to-let investors, even if you need a mortgage for an unusual home it may be worth thinking twice as you may find it difficult to resell or cover with house insurance.
If you want to buy a home with an unusual construction, it's a good idea to speak to a mortgage adviser early in the process. Some mortgage advisers will charge a fee, but others take their commission from the lender and are free for you.
They can help steer you towards a lender that'll accept the house or flat as security for lending.
Can I get a mortgage for an unusual home?
Depending on the type of building you're buying, getting a mortgage may not be straightforward as lenders may worry about structural integrity of the property and the risk of future problems.
Different lenders have different lending criteria when it comes to unusual homes, and one lender may not ask the same questions as another.
- If you want to build your own unusual home - maybe an eco-home or a wooden pre-fab - you may need a self-build mortgage.
- Lenders will usually want to inspect the work and make sure everything is up to standard before releasing the money in stages through the build.
Before starting the process, you could ask a local surveyor whether they've approved similar properties for lenders - to help identify how difficult it could be.
Similarly, looking to a local building society may be a solution. If unusual homes are common in your area, a local building society may be more knowledge and less afraid of the risk, and so more likely to lend to you.
Lenders usually won't refuse to mortgage a property unless they think it's not reliable security for a loan, and if that's the case then it's worth thinking twice about whether the property is right for you at all.
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If a lender does approve you, there may be caveats. They may ask for a bigger deposit and they may charge you a higher rate of interest to balance what they see as the risk of lending to you.
Lenders need to consider how easy a property would be to resell in the event it has to be repossessed, so if they are concerned it may be worth thinking twice.
While a unique, old or eco-home may seem appealing to you, how many people will be happy to buy it in the event you decide to sell?
On the other hand, if you're happy to accept the potential risk of buying a concrete home or flat above a commercial property, that doesn't mean someone else will be.
Different types of unusual properties
A standard or traditionally constructed house is one made of bricks and mortar or stone, with a slate or tiled roof.
A non-standard home is one that isn't made of brick or stone and doesn't have a tiled roof. As such, there's a broad spectrum of unusual homes…
While a flat may not seem in the least unusual, there are a number of types of flats a lender may wish to avoid.
A studio flat for example may be considered non-traditional. If it's too small to house a separate kitchen and bathroom a lender may not lend on it.
High-rise flats in blocks above four or five storeys may also be considered unmortgagable due to building methods - such as concrete or prefabrication - and the risk of them being pulled down.
Listed buildings can also come under the umbrella of homes of non-standard construction, which may make it harder to borrow money to buy one.
Once you buy a listed building you have a responsibility to maintain it (which can be enforced by the local council), so if a lender doesn't think you can afford this they may also decide not to lend to you.
There are many pre-fabricated, concrete homes (PRC homes) up and down the UK, usually dating from the 1950s when quick, affordable housing was needed.
One of the most common examples of this is Wimpey no-fines homes - concrete houses thrown up in great number as social housing after the Second World War.
In the 1980s defects were discovered with these properties - their load-bearing steel columns were eroding over time, meaning their structural integrity was under question.
This meant that mortgage lenders refused to accept these homes as security for a loan.
These properties can, however, be repaired - concrete panels need to be removed and replaced with traditional brick.
This is an expensive and sometimes long process, but will usually make the property mortgageable.
Once the work is done the property's value could increase, which could balance out the initial cost of rebuilding.
BISF (steel-framed homes)
British Iron and Steel Federation (BISF) frame homes are common in the UK and may be mortgagable, but it depends on the lender.
Problems with BISF homes can include corrosion of the steel cladding or the steel structure, their lack of insulation and potential cracking of the ground floor.
Home insurance for non-standard construction
- Before you can complete on your unusual property, you’ll need to take out buildings insurance.
- Getting cover for homes of non-standard construction may not be easy – make sure you compare insurers who are willing to cover you.
BISF homes can be improved by external wall insulation, but this depends on the integrity of the structure.
Timber and timber-framed homes
Timber-framed buildings in their various forms may be considered a risk due to the fact they have little or no foundations. They may also present more of a fire risk than standard buildings, and would be more affected in the event of flooding.
Timber homes are likely to get more popular in the future because of their sustainability and insulation potential, so lenders opinions towards them may change in the future.
Asbestos was used in building construction until around 1970, including in concrete cladding and panels for the walls, ceilings and roof tiles of some houses.
Asbestos homes aren't considered a risk to occupants unless they are damaged or become damaged.
Nevertheless, some lenders won't accept houses with certain types of asbestos construction, or may ask for a specific asbestos survey in addition to the valuation.
Homes with corrugated iron roofs can present issues with corrosion, which can lead to loss of structural strength and integrity.
This can lead to them being unmortgageable or down-valued by the surveyor.
Thatched roofs need re-ridging every 10-15 years and can be a costly investment, so mortgage affordability may be an issue.
While thatched roofs are a risk in the event of fire, homes with thatched roofs aren't more likely to catch fire.
If you're looking into a thatched property, find out when the roof was last thatched, whether the roof has recently been surveyed and have the chimney and electrics checked before buying.