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Cottages & mortgages

The key information you need to know about buying cottages in the UK.

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By Pete Mugleston  | Mortgage Advisor Pete has been a mortgage advisor for over 10 years, and is regularly cited in both trade and national press.

Updated: 25th June 2019 *

Sometimes referred to as ‘period houses’, cottages have long held a place in the mind of the UK homebuyer seeking an idyllic location and a house with rural charm.

Of course, buying a cottage can bring its own challenges, which you’ll learn about in this article.

Trying to get the finance to buy a cottage? Get in touch, and we’ll put you in touch with an expert advisor who can find the right lender for you.

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Do mortgage rules around cottages make them more difficult to buy than other property types?

It depends. In general, cottage mortgage rules aren’t any much different than buying a conventional house. Good credit, a steady income job and a reasonable down payment all tip the odds in your favour.

But it really depends on the type of cottage you want to buy. Most lenders would treat an easy-to-access, four-season, full-service lake house close to the city in the same way they would an ordinary home.

But an off-grid, one-room shack five hours away from all civilisation? Banks are cautious about backing major fixer-uppers, places that may be hard to resell, or cottages that appear to be prone to future disasters, like flooding or landslide.

Can I get a cottage mortgage?

If you’re thinking of buying a cottage instead of a house, one of the first things you should consider is whether you’d qualify for a mortgage on this type of property.

Most lenders consider the following when assessing cottage mortgage applications...

Whether it would be your first or second mortgage

Many of the customers we speak to are exploring the possibility of getting a second mortgage for a cottage, and these applicants are often treated differently to those in the market for a primary residence.

If you’re buying a cottage as your second home you’re likely to face stricter criteria - such as a lower LTV and a tougher financial stress test.

Take a look at our guide to second home finance if you’d like to find out more about this.

Whether you intend to let it out, either as a holiday let (more likely) or a BTL

If you’re intending to buy the cottage to let out (either part time or full time), you’ll not be eligible for a conventional mortgage. Instead, you need specialist financing.

BTL

If you’re intending to acquire a cottage for buy to let, you’ll need a BTL mortgage.

All else being equal, buying a cottage for BTL will be treated the same as any other BTL application.

Lenders will likely impose minimum income requirements, set a higher LTV requirement, and want to see proof that the local rental market is buoyant enough to cover at least 125-130% of your mortgage payments.

Holiday let

Holiday let tenancies work differently than BTL - you’ll need to get a specialised holiday let mortgage.

You’ll be put through a similar set of affordability hurdles as in buy to let - but your choices may be restricted by a limited pool of holiday let lenders.

Get in touch if you want to know more about holiday let mortgages - the advisors we work with have access to the whole market of specialist lenders who are much more comfortable with this kind of deal.

Whether the cottage requires ‘fixing up’ beforehand

Many older cottages often require some kind of modernisation, but provided they’re structurally sound - most lenders likely won’t be too bothered.

However, if you’re buying a cottage that isn’t legally habitable (i.e. the cottage needs to be converted from agricultural to domestic use) you won’t be able to get a regular mortgage.

Instead, you could look at a bridging loan, which you can use to bankroll the development work required to make the place legally habitable, before refinancing to a regular mortgage.

Whether the cottage is listed, and whether it is in a conservation area

Listed buildings and conservation areas impose restrictions on what you can do with the property.

The level of restriction is similar in both. In a conservation area, any external alterations (or extensions) need to remain true to the visual style of the area.

Listed status can be particularly restrictive - it also applies to the interior of the building, along with any structures or objects attached to it - and any permanent features within the garden.

Listing uses a ‘grade’ system - 1, 2* and 2 (in order of decreasing importance). Over 90% of listed buildings are grade 2 - this is the least restrictive of all the grades.

Still, if you’re considering buying a grade 2 listed cottage - it’s worth bearing in mind that there will be lots of rules around what you can do to your new property.

Where the cottage is located and what it is made from

The kind of construction materials used in the cottage will affect the lender’s opinion on the deal. If it has any ‘non-standard’ elements, such as a steel frame or thatched roof, this might deter prospective lenders.

Location is another factor - if the lender believes that the area has resale potential, they may be more inclined to make you an offer.

Can I get a mortgage on a thatched cottage?

It may be possible to get a mortgage for a thatched cottage, but for a property with this type of construction you will almost certainly require a specialist lender.

Thatched roofs are a type of non-standard construction, which some lenders are wary of. This means you could be offered unfavourable rates or be turned away entirely, unless you seek out a specialist non-standard construction mortgage provider.

Make an enquiry and the advisors we work with will introduce you to one of these niche lenders.

What to look for when buying a cottage

There’s a huge amount of variety from one cottage to the next, so you’ll need to consider each individual property on its own merits. Consider the below when weighing up a property - and before making your mortgage application.

Are there any issues around the structure or the title?

A full RICS survey is important. You want to know about any defects to the title and structure itself (such as damp).

If the building is listed, you’ll also want to get a specialised Listed Building Survey. This will help you get an idea of how much leeway you have to make alterations, and if there are any repairs or restorations as required by the Local Authority outstanding.

It will also help you in future to go through the listed building consent process, should you wish to make any modifications.

Will it need much work?

Older cottages can require a lot of work. Unless you’re lucky enough to be buying a recently modernised one - you may find ageing utilities that could do with replacement, a roof that is not what it once was, or walls that need some insulation.

Is it energy efficient? Can it be upgraded?

Older cottage properties were not built to current standards and may be more expensive to keep warm and maintain. Modifications such as cavity walls and green energy generators are all options - but can come at a steep upfront cost.

What to look for when buying a thatched cottage?

Thatched cottages are a particularly popular category of ‘period house’, so we‘ll are briefly cover those here.

It may be surprising to hear, but statistically, thatched roof homes are statistically no more likely to catch fire than those with conventional slate roofs. However, there are a few extra things to bear in mind:

Get a full survey and electrical check done first

Like with any cottage, you’ll want the most detailed survey you can get - along with an expert assessment of the roof. The state of the wiring is particularly important, as it can pose a fire hazard.

There may be more maintenance in the long run

Thatch needs to be replaced roughly every 15-35 years. Most insurers will require a full inspection of your electrical circuits every 5-10 years. If you have an open fire, you have to get your chimney swept.

Insurance may cost more

Which is the case with a lot of non-standard properties. You’ll also want to find a specialist insurer who knows a little more about the reality of a thatched roof property.

It may be listed

A large proportion of thatched properties are listed by English Heritage - this will result in some of the restrictions we outlined earlier.

What about buying a cottage abroad?

In search of adventure, many buyers look beyond the UK when considering a cottage. For example, buying a cottage in England provides a very different experience from buying a cottage in Ireland - but is not without its own challenges and cautionary tales.

Here are a few things to bear in mind before you start seriously pursuing a foreign purchase.

Make sure you find a good local conveyancing solicitor first

It may seem obvious, but the laws and regulations can vary enormously. A British solicitor won’t be able to help you navigate the waters of foreign property law - you’ll need to find the equivalent of a local conveyancing specialist.

Check your rights of residency and how long you might be allowed to stay in the country

Just because you’re buying a property in another country, doesn’t mean that going to visit your cottage is as simple as buying a plane ticket and booking a rental car. You may be subject to visa restrictions and limits on how long you can stay in any given year.

Be aware of additional property taxes

If you do buy abroad you’re likely to incur taxes on your new property. Depending on where you buy, these could be steep - so make sure you do your research beforehand.

For more information about buying a property overseas, consult our dedicated page on this topic.

How to get a mortgage on a cottage

As we’ve discussed throughout this article, cottages often call for a specialist lender and the best way to find one with the right expertise is to apply through a whole-of-market broker.

The experts we work with have access to the entire market and can provide bespoke advice on cottage purchases. They can also introduce you to the cottage mortgage provider best positioned to offer favourable rates to a borrower with your profile.

To get your cottage mortgage application started, make an enquiry here and a specialist advisor will do all of the legwork for you from there.

Need help buying a cottage? Speak to the experts

If you have questions and want to speak to an expert for the right advice, call Online Mortgage Advisor today on 0808 189 2301 or make an enquiry here.

Then sit back and let us do all the hard work in finding the broker with the right expertise for your circumstances.  – We don’t charge a fee and there’s absolutely no obligation or marks on your credit rating.

Updated: 25th June 2019
OnlineMortgageAdvisor 2019 ©

FCA disclaimer

*Based on our research, the content contained in this article is accurate as of 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 info 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.