Steve from the Momentum team joins the Mortgage & Protection Podcast to discuss a specialist subject: non-standard construction mortgages.
A non-standard construction mortgage is a mortgage on a property that is not built with standard construction methods such as bricks and tiles. Examples are concrete buildings, prefabricated buildings, timber frames, and homes with a thatched roof. Flat roofed and listed buildings also come under this category.
It’s quite hard to determine a property’s construction method just by looking at it. A timber framed property, for example, can be clad with bricks.
The main way of finding out is either from the vendor or by checking the planning records with the local authority. But theoretically, a vendor should tell the estate agent, and it should be stated on the property advert.
Yes – you will just need to clear it with your lender. They will need to have the details about the method of construction so they can understand the risk involved and whether they’re prepared to lend against it.
They will look at the construction method, your deposit, and the condition of the property as part of the decision.
For most Grade II listed buildings a high street lender will generally lend to you. You will need planning permission to make any changes to the property, so you lose your permitted development rights on properties that are listed.
Meanwhile a Grade I listed building is considered by National Heritage to be of significant historic importance. A lender would see this as an increased risk – but each has its own different criteria. It might take you more time and research to find a mortgage on a Grade 1 home.
Some people believe that you can’t get a mortgage on properties built with concrete, but in fact, concrete is being used more and more often these days.
This belief has come about because of post-war prefabricated concrete properties called area houses, which weren’t built to last. You can’t get a mortgage on these unless the property’s been repaired and has a guarantee with it.
A modern method of concrete construction is insulated concrete formwork, and this is generally accepted as long as it meets building regulations. The best approach with a concrete property is to check out the construction type when it was built and then talk to a broker before you proceed with the purchase.
A prefabricated house is where part of the house has been manufactured in a factory before being shipped to site. Materials or walls are constructed elsewhere and then assembled on location. There are different types of prefabricated homes, so again it’s important to seek advice before making an offer.
A modular home is a type of prefabricated home, where the property is built out of preassembled parts. It’s put together on site – a bit like building with really big Lego bricks.
modular homes can be put together extremely quickly.
Yes, but the date of construction is important. Anything between 1920 and 1965 could cause you a struggle as building regulations at this time were less rigorous. The issue is the lack of vapour barriers under the cladding, which means that the timber frame could rot.
Meanwhile, older timber framed properties are more acceptable, mainly because this issue would have been dealt with. Modern homes will also be fine because of building regulations.
Yes, you can get a mortgage on a steel framed home, although the lender may want to see a structural engineers’ report. The reason for that is because the steel frames can corrode or warp, although this is fairly rare. Steel frames are not usually a problem – it might mean a more in-depth report or a slightly bigger deposit, but generally, you should get a loan.
A barn conversion will be treated like any other type of property. They are subject to the same building regulations as any other, although that does depend on construction methods and materials used.
If the conversion has been done in the last couple of years, then it might be considered by the lender as a new build property. So the lenders could require a warranty on the property or for it to be signed off by an architect at various different stages. Sometimes this can catch smaller builders out when they do conversions, so it’s worth checking what paperwork is required and whether it exists.
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE