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Church Conversion Mortgages

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Pete Mugleston

Author: Pete Mugleston - Mortgage Advisor, MD

Updated: August 9, 2021

Living in a converted church is a dream for many, especially those who are looking for a home that’s out of the ordinary. But how do you buy a converted church, what type of mortgage do you need, and what finance is needed if you’re converting one yourself?

In our guide to church conversion mortgages, we answer all of these questions and more, plus you’ll also learn how the right mortgage broker can help you achieve your plans.

Can you get a mortgage on a converted church?

Yes, absolutely. If you want to buy a church that has already been converted for residential use, this isn’t radically different to getting a mortgage on a regular house or flat. There are extra things you might need to consider, though, and potential pitfalls to be mindful of.

To buy an already-converted church, the mortgage process is the same as it would be for any other type of residential property and the lender will assess the strength of your application based on the same factors. But bear in mind that there’s a possibility of ending up with a higher interest rate than what you’d qualify for on a ‘standard’ home.

Why interest rates can be higher

This is because risk factors are often present with ex-church properties. Firstly, many of them have unique features and therefore fall into the ‘non-standard’ construction category. This often means a specialist lender is called for and, depending on the exact nature of the property, they might only approve you for a higher rate to offset the risk.

Another reason the rates might be less favourable is that many decommissioned church properties are listed buildings. This might limit your choice of approachable lenders, depending on what grade the property has, as not all mortgage providers are happy to lend on listed buildings. Others might do so with caveats, but having a restricted choice of lender can make it more difficult to get a mortgage deal that fits your needs and requirements.

The good news is that there’s a quick and easy way to boost your chances of avoiding a hefty interest rate and landing the best deal possible. There are mortgage brokers who specialise in non-standard properties, listed buildings and church conversions, and they have deep working relationships with the lenders who offer the best rates on these property types.

Requirements for a mortgage on a converted church

In addition to meeting the mortgage lender’s eligibility criteria, anyone who is buying a church property for residential purposes should check that the following are in place…

  • Planning permission: If you’re buying a church property that has already been converted for residential use, planning permission may already be in place, but it normally expires after three years. You might need to re-apply for it if you’re planning on making any changes to the property before or after you move into it.
  • Listed building consent: This will be needed if the church is a listed building. This can be provided by the local authority, who can also grant planning permission.
  • Church body approval: A church building needs to be fully decommissioned – or deconsecrated – before it can be used as a residential property. This might apply if the property you’re buying is yet to be fully converted or has never been used for residential purposes. A draft pastoral scheme will need to be drawn up for this.
  • Additional lender requirements: Some mortgage lenders apply their own caveats on church properties. For example, there are a few who won’t lend if the property is next to a graveyard. Other lenders will insist on extra underwriter scrutiny to make sure there are no deal-breaking issues with the property or your legal right to buy it.

There are often extra things to consider and processes to go through when buying a converted church property, but that doesn’t mean your application has to be convoluted or daunting.

Can you convert a church into a house yourself?

Yes. If you have the means and expertise to convert a church property yourself or oversee its development into a residential home, there are finance options available for this.

One of the most popular types of finance for residential church conversions is a self-build mortgage. These mortgages are specifically designed for borrowers who want to carry out their own development work. They work similarly to standard mortgages, except the funds are released at key stages during the development and the rates are usually higher.

To get a self-build mortgage for a church conversion, you will likely need…

  • Development experience
  • Planning permission and listed building consent
  • Church body approval
  • At least 20% deposit

Self-build mortgages are usually only offered by specialist lenders and their eligibility criteria, in general, can be strict. There are, however, brokers who specialise in self-build finance and they can boost your chances of approval by matching you with the optimum lender.

What’s more, a broker with the right knowledge and expertise could even help you get a self-build mortgage to convert a church if you have limited or no development experience and less than 20% deposit. They have deep working relationships with all self-build mortgage lenders and know which ones have a higher appetite for risk.

Once the development work has been completed, most borrowers remortgage onto a standard residential agreement. A broker can also help you here by making sure you end up with the best remortgage deal available to you at the most favourable rate around.

Although a self-build mortgage is arguably the most popular type of finance for DIY church renovation projects, alternative options could be available to you.

Read on to find out more…

Choosing the right finance

If your aim is to buy a church property that has already been converted for residential use and you don’t have the funds available to purchase it outright, a mortgage would usually be the logical solution. A possible alternative could be remortgaging another property you own to release equity for the church purchase, but needless to say, not everyone has this luxury.

There may be a wider choice of alternative options for borrowers who are looking to renovate a church for residential purposes themselves.

They include…

  • Remortgaging a property you already own: If you already own a property you’re planning to keep and the equity you hold in it would cover the cost of the development work, remortgaging could allow you to release that capital.
  • Bridging loans: These are short-term interest-only loans that can be arranged very quickly. They can act as an alternative to a self-build mortgage if you need to complete the property purchase quickly, aren’t eligible for a self-build mortgage, or need a relatively small amount of capital for the development.
  • Personal loans: If you need a certain amount of capital (£25k or less) to add to funds you’ve already got, a personal loan could be a viable alternative to a mortgage or another type of borrowing that can only be used for large amounts of money.
  • Development finance: This is basically the commercial equivalent to a self-build mortgage and it could be an option if you’re buying a church and plan to covert it for investment purposes. This could include turning it into buy-to-let accommodation.

These are merely a few potential alternatives to the mortgage options available for church conversions. The right mortgage broker can go through these options and more with you, offering you advice on each to help you make an informed decision on which to choose.

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Potential pitfalls

Here are some of the pitfalls to look out for with church conversions…

  • Issues with the building: Structural issues and other problems are not uncommon since many decommissioned church buildings have been out of use for a while. Most experts would recommend finding a surveyor who specialises in this property type as they will have in-depth knowledge about what to look for.
  • Right of access and restrictive covenants: If the church you’re buying has an in-commission graveyard on site, the relatives of those who are buried there will still have the right to visit their relatives’ graves. Restrictive covenants may also be in place to restrict alterations to the property, such as changes to its facade.
  • Planning application costs: If you need to make any additional changes to your property after you’ve bought it, this might mean having to file a planning application, which isn’t free. Try to ensure the property is of a satisfactory spec when you move in, since having to make extra renovations can carry an extra cost each time.
  • Higher interest rates: We’ve already touched on this possibility. If the church you’re buying falls into the ‘non-standard construction’ category, you might be hit with higher interest rates and need a specialist lender to approve your application.
  • Higher  insurance costs: Very often, the cost of insuring your buildings and contents could well be higher due to the nature and structure of the property and the risk the insurer is taking in insuring the property.

The possibility of these pitfalls is another good reason to speak to a broker before you apply for a mortgage for a church conversion. The right advisor can talk you through every potential risk and help you take steps to safeguard yourself from them.

Speak to a broker who specialises in church conversions

Speaking to a mortgage broker who specialises in arranging finance for church conversions is recommended before you press ahead with your plans. This can boost your chances of mortgage approval and increase the likelihood that you will end up with favourable rates.

We’ve made it our mission to make sure people get the right mortgage advice and we offer a free broker-matching service to pair you up with your perfect advisor. After a quick assessment of your needs and requirements, we will match you with an expert we’ve vetted and recommended based on their track record with church conversion mortgages.

Call us on 0808 189 2301 or make an enquiry and we’ll arrange a free, no-obligation chat between you and a broker who specialises in church conversion mortgages today.

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About the author

Pete, an expert in all things mortgages, cut his teeth right in the middle of the credit crunch. With plenty of people needing help and few mortgage providers lending, Pete found great success in going the extra mile to find mortgages for people whom many others considered lost causes. The experience he gained, coupled with his love of helping people reach their goals, led him to establish Online Mortgage Advisor, with one clear vision – to help as many customers as possible get the right advice, regardless of need or background.

Pete’s presence in the industry as the ‘go-to’ for specialist finance continues to grow, and he is regularly cited in and writes for both local and national press, as well as trade publications, with a regular column in Mortgage Introducer and being the exclusive mortgage expert for LOVEMoney. Pete also writes for OMA of course!

Read more about Pete

Pete Mugleston

Mortgage Advisor, MD

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FCA disclaimer

*Based on our research, the content contained in this article is accurate as of the most recent time of writing. Lender criteria and policies change regularly so speak to one of the advisors we work with to confirm the most accurate up to date information. The information on the site is not tailored advice to each individual reader, and as such does not constitute financial advice. All advisors working with us are fully qualified to provide mortgage advice and work only for firms who are authorised and regulated by the Financial Conduct Authority. They will offer any advice specific to you and your needs.

Some types of buy to let mortgages are not regulated by the FCA. Think carefully before securing other debts against your home. As a mortgage is secured against your home, it may be repossessed if you do not keep up with repayments on your mortgage. Equity released from your home will also be secured against it.

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