Church Conversion Mortgages

Find out how to get a mortgage on a church conversion.

Is the property of Non-Standard Construction?

Home Property Types Church Conversion Mortgages
Pete Mugleston

Author: Pete Mugleston

Mortgage Advisor, MD

Nathan Porter

Reviewer: Nathan Porter

Independent Mortgage Advisor

Updated: April 3, 2024

How we reviewed this article:

Our experts continuously monitor changes in the financial space and work closely with qualified mortgage advisors for factual verification.

April 3, 2024

If you love the idea of a home that’s a little out of the ordinary then converting a church could be just the challenge and the character you’re looking for. Hundreds of surplus churches have been sold off since the law changed in 1969 allowing them to be offered for alternative uses, with many being converted into houses or apartments.

The process of church conversion can be complex though, so in this article we’ll look at planning permission, church body approval and explain the different options available for financing your renovation project.

Can you get a mortgage to convert a church into a home?

Yes you can. Converting a church is very different of course to just buying a regular house so you won’t be able to get a standard mortgage. A self build mortgage would be the most usual form of finance for this sort of project, but there are other funding options available.

Aside from the fact of it being a church conversion, you’ll need to meet the mortgage lender’s affordability and eligibility requirements to qualify for a loan, so things like your income, credit history and the amount of deposit you’re able to put down will be important.

What does the process involve?

Before you can get as far as thinking about your eligibility, you’ll need to make sure the building itself is eligible for conversion. There are several key parts to this, all of which will need to happen before you can get a mortgage.

  • Find yourself a closed church. As well as searching directly via estate agents, the Church of England closes surplus churches every year and keeps a list of all the churches available to buy or lease in the UK. The Church of Scotland and The Church in Wales also keep a list of their properties for sale, including disused churches.
  • Get church approval. In order to be converted into a residential property a church needs to be deconsecrated and the church body needs to approve its disposal. A plan for this, called a draft pastoral scheme, needs to be drawn up and implemented.
  • Get planning permission. This is granted by your local authority and is vital before you can get a mortgage. Some closed churches are sold with planning permission in place, but you’ll need to double check that this covers everything you want to do and won’t need renewing.
  • Secure listed building consent. Your local authority will also deal with listed building consent, although if your church has Grade 1 status then you will also need approval from English Heritage for your alterations.

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What type of mortgages can you use?

The most common way of financing a church conversion is with a self build mortgage. This type of home loan works in a similar way to a regular mortgage but rather than getting all of the money in one go to purchase a property, capital is released in stages as you work through the project. A lot of people then remortgage to a repayment mortgage once the build is complete.

Self build mortgage lenders tend to be more specialised and your choice may be limited further by any specifics about your building such as non-standard construction and listed building status. Fortunately, if you use a broker they will be able to factor in all of these potential issues and find you the best deals.

If a self build mortgage doesn’t work for you then there may be other ways to finance your church conversion, such as remortaging to release equity from another property you own. A bridging loan could also be suitable in some circumstances, usually if you are either planning to sell your current home once the conversion is complete or if you’re converting to resell. Bridging loans aren’t a cheap form of finance, so talk to a broker about realistic costs before you commit.

If you’re converting the church for commercial purposes, perhaps to let out as apartments or as an office or studio space, then you may be eligible for a commercial mortgage or development finance.

How a broker can help with a church mortgage

Financing a church conversion isn’t simply a case of picking a standard mortgage and getting started, it’s a very niche project and the lending criteria can be complex. It can feel daunting trying to work out which finance option is best for you, but don’t worry, this is where a broker comes in.

The brokers we work with can look both at your wider financial circumstances and the specifics of your church conversion and guide you to the best lenders for you, often niche lenders that might be harder to find by yourself. They’ll be able to negotiate on your behalf to get the most competitive rates and make sure that you’re on top of all the documentation you’ll need to have to get your finance in place.

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What are the lender requirements?

Self build mortgages are typically offered through specialist lenders and you should expect to pay higher rates on a self build mortgage for a church conversion than a standard mortgage because of the higher risk involved. Deposits are also higher, with most lenders looking for a minimum of 20%. If the deposit makes it impossible for you then the government’s Help to Build equity loan scheme could be something to consider.

Halifax for example currently has two self build mortgage products, one for movers and one for first time buyers. In both cases, it will only lend up to 75% of the final valuation and the initial interest rate is 5.91%.

The Ecology Building Society, which specialises in mortgages for unique conversion projects, is currently offering a standard variable rate of 4.65% You can borrow up to 80% of the property’s value on a repayment basis, or up to 75% interest-only.

As well as having in place things like planning permission and church approval, as already discussed, some lenders may also require you to have development experience so they feel confident you can complete the project. This isn’t a deal breaker though and a broker can help work around this if required.

Things to consider

Converting a church is going to be much trickier than if you were buying a standard home, or even if you were embarking on a more traditional self build project. So, it’s important to think through all the potential pitfalls before you start so that you can factor them into your budget and timelines.

Structural issues

It’s worth getting in a surveyor who has experience of church conversions to assess the project before you start. Churches are normally very old buildings, often with additions or extensions from later periods, so age and construction may vary throughout the property. If the church has been empty for a significant period of time this may also have compromised the structure.

Planning and insurance costs

Be sure to budget not just for costs that you could incur during the conversion process, such as planning permissions and specialist surveyors, but also higher costs once you’re living in your home. Buildings insurance could well be higher for a non standard construction home and heating costs are likely to be high in a church conversion too.

Restrictive covenants and right of access

If your church has a graveyard attached make sure you check what rights relatives have to be able to access the graves, otherwise you may find a lot of strangers suddenly in your garden! You may also be restricted as to what changes, if any, you can make to the outside of the church and the facade.

Get matched with a broker experienced in church financing

It’s a good idea to talk to a broker who specialises in church conversion finance before you start the process so that they can advise you on the best option for you and how best to proceed. Without a broker you could end up wasting valuable time and money, where an expert could take you straight to the best lenders.

Give us a call now on 0808 189 2301 or make a quick online enquiry and we’ll ask you a few questions about your situation and match you with the most relevant broker. All of the brokers we work with have been thoroughly vetted so you can get in touch with total confidence. Our matching service is free of charge and there’s no obligation, so you’ve got nothing to lose.

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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 Online Mortgage Advisor of course!

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Pete Mugleston

Mortgage Advisor, MD

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