Securing a mortgage for non-standard construction properties can be a challenge, but it’s not impossible. Specialist lenders exist to cater to these unique situations, offering competitive deals on mortgages. While mortgage brokers are often the quickest way to find such mortgages, this guide aims to provide comprehensive insights into non-standard construction properties and the associated mortgage options.
What is a Non-Standard Construction Mortgage?
Non-standard construction mortgages are specialised loans designed for properties with unconventional construction types. These properties deviate from the typical brick-and-mortar structures found in standard homes. Some mortgage lenders are hesitant to offer loans for such properties due to the added complexities and risks involved in assessing both the property and the loan application. However, certain mortgage lenders specialize in non-standard construction properties and provide streamlined underwriting processes with competitive rates, given their understanding of these unique properties.
What Qualifies as a Non-Standard Construction Property?
Several factors can classify a property as non-standard construction. Common examples include properties with:
- Thatched roofs
- Steel or timber frames
- National Heritage Listings with historical or architectural significance
- Tower blocks or high-rise flats
- Properties constructed from concrete
- Pre-fabricated buildings
- British Iron and Steel Foundation (BISF) properties
Other unconventional features, such as walls made entirely of glass or the use of non-traditional building materials, can also lead to a property being considered non-standard construction. The category is broad, reflecting the wide array of materials and construction methods employed by builders and architects.
Challenges with Non-Standard Construction Mortgages
From a lender’s perspective, providing mortgages for non-standard construction properties poses additional risks and complications. For example, thatched roofs, common in country cottages, require regular and costly maintenance. Lenders consider these factors, which can impact borrowers’ ability to make mortgage repayments. Additionally, the need for roof replacement during the mortgage term can be a significant expense. Fire hazards associated with thatched roofs can lead to higher building insurance premiums, further adding to the risk.
Issues Faced by Banks
Many non-standard properties share drawbacks similar to thatched roofs, such as being:
- Safety hazards
- Expensive to maintain
- Difficult to insure due to safety or security concerns
- Subject to rigorous inspections and risk assessments that entail higher costs for lenders
- Challenging to sell due to complications associated with non-standard construction
For listed building mortgages, repairs typically require the use of original materials, which can be more expensive and present an additional risk to lenders.
Can a Non-Standard House Be Converted to Standard Construction?
Converting a non-standard construction property into a standard one is possible, but the feasibility depends on the specific issues involved. For properties with steel or timber frames, complete rebuilding may be necessary. Replacing the roof or reconstructing walls is a viable option but can be expensive, potentially outweighing any benefits gained from qualifying for a standard mortgage. In cases where a property is unmortgageable, using a bridging loan to secure the purchase, complete renovations, and subsequently refinance with a standard mortgage may be a solution.
Difficulty of Getting Mortgages on New Builds
New build properties, classified as non-standard construction, can pose challenges for obtaining mortgages. For instance, pre-fabricated homes, constructed off-site and often made of concrete, are efficient in terms of production but can incur substantial expenses for repairs or replacement due to their construction method. These factors make them more expensive to insure and riskier for lenders.
Challenges with Concrete Houses
Concrete homes, particularly pre-fab structures assembled on-site, can be challenging to insure and may pose difficulties in securing a mortgage from traditional lenders. However, specialist lenders or mortgage brokers with expertise in non-standard construction properties can still offer lending options for such properties.
How to Get a Non-Standard Construction Mortgage?
Similar to standard mortgages, lenders offering non-standard construction mortgages will assess your personal circumstances, financial situation, and potentially your experience with property development if renovation work is required. Seeking advice from specialist mortgage advisers, like FinSpace, streamlines the process and provides access to the best available deals.
These advisers have expertise in the non-standard construction mortgage market, allowing them to identify the most suitable lenders for each situation and compare rates and terms. With their guidance, applicants can be well-prepared and obtain pre-approval before making an offer on a property, reducing hassle and ensuring access to favourable lending options.
Navigating the world of non-standard construction mortgages requires expertise and access to the right lenders. This is where FinSpace can be your trusted partner. Our team of mortgage advisers specializes in finding tailored solutions for unique property situations, including non-standard constructions. Property Finance Compare is your partner in securing a non-standard construction mortgage. With our expertise and industry connections, we make the complex process simpler and more accessible, helping you achieve your property ownership goals, even in the world of unique and unconventional constructions.