Mortgages for Steel-Framed Homes

Lending criteria for steel-framed properties

Lending criteria can vary significantly from one lender to the next, as each property can be a unique case, and something that is difficult to have a black and white policy about. For this reason most lenders will insist that a structural engineer or building surveyor carry out a thorough survey, and will lend based on what the valuer tells them about how “suitable” it is.

To assess suitability, they look for current condition, construction material risks, and any impact to resale prospects. The age of the property will often be considered. Some lenders will only accept properties that were built after the 1950s. Others are even more selective, insisting the property must have been built after 2000.

Once this is understood, lenders can decline to lend or in some instances, limit the amount they’ll lend to a certain loan-to-value (LTV) – For example, 75% – to limit the risk exposure should something go wrong. That said, there are lenders that if happy with the property will offer standard terms, and access to their full range of products up to the highest LTVs.

Which lenders will consider these properties?

Here are a few examples of the restrictions you might encounter from specific lenders:

The Mortgage Lender

They will only approve mortgages for those buying a modern, purpose-built flat. They will also only lend to those who can provide a 3-year address history and are likely to take student loans into account when assessing applicants’ affordability.

Norton Home Loans

Requires a full valuation before deciding whether to approve an application. If the surveyor says the property isn’t fit for conventional mortgage lending, the LTV will be restricted to a maximum of 50%.

Coventry Building Society

Will only consider properties that have been built on or after 1st January 1990. They also insist that at least 67% of the property’s cladding must be brick or stone. Properties with large concrete panels, timber, plastic metal sheeting and tiles are excluded in many, but not all, cases.

Halifax

They will base their decision on the valuer’s report and accompanying comments. All non-standard construction properties are assessed on individual merit.

These examples show that getting a mortgage on a steel-framed home can be complicated. This area of the market can be difficult to navigate alone. If you’d like help finding the lenders most likely to approve your application, or if you’ve already had an application declined, look for a specialist mortgage broker with experience dealing with non-standard properties.

Can you get a mortgage for a BISF construction?

Yes, but unfortunately, getting a mortgage for a BISF home can be extremely challenging because this type of steel-framed building is often considered more risky than others. A large number of steel-framed homes are British Iron and Steel Federation (BISF) properties.

Some specialist lenders will consider lending on BISF builds, but you may need to put down a larger deposit or pay a higher interest rate.

These lenders can be difficult to find without the help of a professional who knows this corner of the market well. Luckily, some brokers specialise in non-standard property types, and their knowledge, expertise, and lender contacts can boost your chances of getting a mortgage approval.

What about steel-framed extensions?

If you’re buying a standard property but it has a steel-framed extension, some lenders may be reluctant to approve your application. Specialist lenders will probably still want to conduct a thorough valuation, even though most of the property is traditionally built. The age of the extension may also play a role in lenders’ decisions.

If only part of the property has a steel framework—in this case, the extension—your choice of lenders and products might be wider than for somebody buying a home with steel frames throughout.

How to increase your chances of getting your application approved

There are a few ways to improve your chances of getting a mortgage on a steel-frame property.

You might decide to:

Save a bigger deposit

Saving a bigger deposit is easier said than done, but it can improve your chances of getting the mortgage you need. Most residential mortgage lenders ask for a deposit of at least 10%. This means you may need an even larger deposit to buy a steel-framed home.

Generally speaking, the bigger your deposit, the more comfortable lenders are about approving your application. This is because it reduces the risk they’re taking and gives them some protection if things were to go wrong or you couldn’t afford your mortgage payments.

Improve your credit rating

If you’re able to improve your credit rating before applying for a mortgage, this could make it easier to get the loan you need. Unfortunately, building your credit score isn’t an overnight process, and it can take a number of months.

Here are a few steps that could help you improve your score:

• Make existing debt payments on time and in full.
• Settle any debts you’re in a position to clear.
• Check your report with the three main credit referencing agencies (Experian, Equifax and TransUnion) to see if there are any inaccuracies.
• Let the referencing agencies know if you spot any mistakes.
• Register to vote on the electoral roll.
• Avoid making any unnecessary credit applications.

If you’ve struggled with debt in the past and your credit score has been affected, getting a bad credit mortgage may be possible.

Use a mortgage broker

A mortgage broker can help you overcome home-buying obstacles and get your loan. They’ll know the property market inside out and can compare hundreds of different lenders and mortgage deals to find the right one for you.

Your mortgage advisor will also know which lenders are least likely to approve your application based on your circumstances. With this knowledge, they can help you avoid damaging your credit score with a rejected application.

The importance of paying for a building survey

It’s a good idea to pay for a thorough building survey before making an offer on a steel-framed property. Since this type of property is considered ‘non-standard’, a Level 3 home survey may be needed. Your surveyor will inspect the property and look for any issues that could affect its value and make it harder to resell in the future.

Not all steel-framed houses are built the same way, and some are considered less risky than others. If you’re lucky enough to be buying one that does well in the survey, this could make it easier to get a mortgage.

If you apply for a mortgage with a lender who’ll consider lending to steel-framed house buyers, they’ll usually carry out a thorough inspection of the property themselves, too. This can make the application process longer than it would ordinarily be, and there may be more admin involved.

Speak with a broker who specialises in steel-framed properties

We offer a broker-matching service designed to make it easier for you to find the right mortgage broker. We can even pair you up with a broker who specialises in steel-framed properties. They’ll take most of the paperwork and admin off your hands, saving you time, energy and stress.

In some cases, they might even be able to speed up the process and get you a mortgage quicker than if you were applying alone.

Give us a call at 0330 818 7026 or make an enquiry. We’ll set up a no-obligation chat between you and a broker who specialises in helping buyers overcome common steel-framed property obstacles.