Mortgages for a property of unusual construction

What does non-standard construction mean?

Non-standard construction refers to properties that aren’t your typical brick or stone build with a tiled/slate roof. Some of these can include the impressive and unique – such as historic properties or converted lighthouses – through to homes made entirely from concrete, those with steel frames and glass walls, high rise flats, timber frame homes, prefabs, barn conversions and listed properties.

The range of what might be classed as non-standard or unusual construction is very wide, and even then, different lenders may have different definitions. At its most basic of levels, if you want to buy a property outside of the norm – one that isn’t simply brick and tile – it may be of non-standard construction, and you’ll need to find a mortgage lender that will accept its construction type as part of their underwriting criteria.

What sorts of properties are not eligible for a mortgage?

Bear in mind that there are a few types of property that you will flat out be refused any kind of mortgage for. These include:

• park homes
• lodges (typically of wooden construction but this can vary)
• static caravans

Purchasing any of the above will only be possible through a personal or secured loan which is secured against another property.

How to find out if a house is non-standard construction

You may be able to tell simply by looking at the property if it’s of non-standard construction. The walls and roof will be your biggest giveaway, though it may not always be that obvious, in which case you may need to ask the seller for appropriate documentation.

You should always consult a surveyor as well, not only to confirm the construction type but also to flag up any additional issues so you know whether it’s worth going ahead with the purchase. Find out more in our guide to mortgage valuations vs. surveys.

Can you get a mortgage on non-standard constructions?

You can, but both your choice of lender and the number of mortgages available to you will be less than for properties of a standard build. This is because homes of unusual construction will typically carry higher risks that can cause the lender to be cautious about lending against that property.

For example, thatched roofs pose a significantly greater fire risk than ordinary tiling, while an historic, timber-framed manor house from the 14th century is highly unlikely to have been built to meet modern housing safety standards.

At the other end of the scale, precast concrete buildings built just after World War II were not designed to be in use for so long and can be plagued with maintenance problems, which can again make it more difficult to secure a mortgage.

Is it hard to get a mortgage on a non-standard construction?

It can be more difficult to get a mortgage on a property of non-standard construction, both for the fact that your options are more limited when it comes to mortgage deals, and because even specialist lenders will be more risk-averse with these kinds of properties.

Reasons why lenders are cautious with these properties can include:

• possible structural issues
• more expensive to maintain
• insurance challenges
• lower resale value
• can be a safety hazard
• greater risk assessments required.

Ultimately, lenders need to make sure they’ll get their investment back should you default on your mortgage, and the nature of non-standard properties means this can be harder to guarantee. But securing a mortgage on this kind of property isn’t impossible, and the decision to lend against it depends on the provider’s underwriting criteria and the assessment made by the surveyor.

Lenders will want to check that the property is viable for a mortgage and will use a standard valuation process to do this. With certain properties the surveyor may decide that they require more in depth information to be able to make an accurate valuation.

They may then request a specialist report, for example a timber frame house may need a damp and timber report to check its condition. This information is then used to finalise the valuation to the lender who can then form a decision about whether to lend or not.

Will a mortgage for unusual construction cost more or have restrictions?

Lenders may charge higher rates for these kinds of mortgages due to the additional risk they’re taking on, and because your choice of lenders is more restricted in the first place, some of the best mortgage deals will likely be out of reach.

You may also be asked to provide a larger deposit to again counteract some of the additional risk, so high loan-to-value mortgages probably won’t be an option for you.

Your best bet will be speaking to a mortgage broker who has experience in dealing with these kinds of mortgages, as they’ll know both the lenders to approach and how to help with the more unique requirements of buying this kind of property.

How to get a non-standard construction mortgage

Your first step is to find a provider who offers mortgages on properties of non-standard construction. Typically speaking, challenger banks and building societies tend to be more likely to accept these properties, but a broker will be able to point you in the right direction as they’ll have up-to-date knowledge of which lenders are active in the sector.

From there the process is broadly similar to any other kind of mortgage application, though you should be prepared for additional scrutiny when it comes to your finances – the lender needs to be confident that you can afford the mortgage alongside the additional costs of having a property of this nature, so you’ll need a good credit score and likely a higher income than if you were buying a standard property, and should be able to offer a higher deposit as well.

What to consider

There are several things you’ll need to pay extra attention to when buying a home of non-traditional construction. These include:

• The valuation/survey. Having a full and comprehensive survey is a given for any non-standard property. Any lender will require this to decide if they can give you a mortgage, and you’ll likely need a full structural survey – not just a valuation or homebuyers report – to cover all the bases. Not only is this essential for the mortgage application process, but it also provides you with valuable information about the condition of the property and the potential costs of future repairs or maintenance.
• Maintenance. Non-standard properties often have drastically increased maintenance costs, particularly those of pre-cast reinforced concrete (PRC), listed buildings or those made of more traditional materials such as cob or clay. The maintenance history of such a property can be a key indicator of what problems you can expect in the future, though while it would be wise to make sure you have a full and comprehensive record of all maintenance, this does not preclude the risk that fresh issues could pop up at any time.
• Future demand and later sale. Usually, when you find a new property you love, the idea of selling it again is the last thing on your mind. However, with non-standard construction properties, you’d be well-advised to think very carefully about how easy it will be to sell if and when you want to.

Insuring a non-standard construction

Insurance will be another key factor to consider, and unfortunately, any kind of insurance for properties of this kind will likely be both harder to find and more expensive. The provider will need specific details of the property and, depending on the situation, they may not be willing to provide cover at all – and if they are, it’s almost certain to cost more than if you had a more typical property.

Yet this is only to be expected with properties of this nature, which can have far higher maintenance costs and can be riskier in general. To mitigate this, it could help to go through a broker who is familiar with the marketplace and therefore knows the insurers who will be willing to consider granting cover, and can help you source the best price as well.

Can you change a non-standard construction property?

You won’t be able to change the mortgage lender’s mind of what counts as a property of non-standard construction, but once you own it, you may be able to make the necessary changes to convert it into a more traditional home.

Yet this will depend on the property itself and its underlying structure. If it’s simply the case of changing a roof from shingles to slate, for example, it could be a fairly simple process. But if it’s a timber or steel-framed house you wouldn’t be able to convert it, because the structural core of the property couldn’t be altered and so it would always be non-standard.

What next?

If you’re considering buying a property of non-standard construction, make sure to speak to a broker for advice.