Non-Standard Construction Mortgages
Lee and Neezam talk all about Non-Standard Construction Mortgages.
What is a Non-Standard Construction mortgage?
A Non-Standard Construction mortgage is generally for any building that’s not your typical brick house with a tiled or slate roof. Non-Standard Construction is a vast heading that covers everything from thatched roof properties, flat roofs, listed buildings, and prefabricated concrete to timber and steel framed properties.
How difficult is it to get a mortgage on a Non-Standard Construction property?
It is difficult, as each lender accepts different types of Non-Standard Construction property. The challenge is finding those lenders who will accept the exact type of property you are considering, which is where the services of a qualified mortgage broker come in.
Our experience allows us to determine which lenders can help with the Non-Standard Construction properties. Sometimes they require a more substantial deposit, and it may be more challenging to get a mortgage with a 5% deposit on a steel frame property or flat roof property.
Can you get a Buy to Let mortgage on a Non-Standard Construction property?
There are lenders that will offer Buy to Let mortgages on Non-Standard Construction buildings. Typically what they’re going to be looking for is the re-saleability of the property, because Non-Standard Construction properties are deemed to have a more narrow market.
Lenders tend to be a bit more cautious with this type of construction, but with a Buy to Let mortgage, generally speaking, you’re providing a bigger deposit, usually 20%-25%, so that mitigates some of that risk of them not being able to resell it quickly.
They’ll also consider whether there is rental demand for properties of that type of construction in the area, which they will rely on their surveyor to confirm. As long as it ticks those boxes and you’re going with the right lender for the type of property, then it’s certainly possible.
Can I get a mortgage on a concrete built or a timber framed house?
Yes, it’s a possibility both in terms of concrete houses and timber framed properties. It’s going to depend on finding lenders that are happy with timber framed or concrete built houses. They do deem it a slightly higher risk because it’s a bit more of a niche construction type, so you could be looking at specialist lenders and for timber frame properties for example, whereas with concrete construction, there may be some high street banks to consider. It’s a matter of speaking to a professional to get the relevant advice.
Can you get a mortgage on a barn conversion?
It depends on what stage you’re at. If you’re buying a barn to convert it, then actually that would come under more of a self-build mortgage, which is quite a specialist area of advice. There are very limited lenders that will lend with on self-build mortgages.
If you’re buying a barn that has already been converted and you are the first person to move into it, then it would often be considered a new build property, which means the lender’s criteria can be slightly different again.
What does a prefabricated house mean?
A prefabricated house has effectively been pre-built in a factory either in parts, such as individual walls or particular rooms, and then transported to build a home where all of the pre-built parts are put together.
Again, it can be difficult to obtain a mortgage for a prefab property, and there’s no real way of knowing from the front face of a property whether it is prefab or not because some are covered in brick or cladding. Your agent should notify you of what type of construction the property is.
What costs are involved with Non-Standard Construction mortgages?
With Non-Standard Construction mortgages additional costs may be incurred because we’re having to approach a more specialist lender. Independent lenders do tend to charge higher arrangement fees, because generally speaking they take on the higher risk in lending on this type of property.
You might find that you’re paying more interest than you would find on the high street. They very often rely on their surveyor to go out to the property, do an assessment and then provide them with advice. You might find that the lender’s surveyor requires a bit of further investigation from someone that specialises in timber or a specialist steel frame survey carried out.
Speaking with a broker you can get the idea of what kind of fees you might be looking at, before you enter into negotiations.
How can I prepare for a Non-Standard Construction mortgage application?
It’s a good idea to check with the selling estate agent and with the seller themselves whether they have already done reports that might be needed by surveyors throughout the application process, because that can save you time and money, surveys are often over £1000.
Be prepared to put a bigger deposit in, and that it may be very difficult to get a Non-Standard Construction mortgage, if you’ve only got a 5-10%. A broker will be best placed to help you prepare for this type of application.
Some buy to let mortgages are not regulated by the Financial Conduct Authority.
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