Uninhabitable Property Mortgages

Hoping to get a mortgage for an uninhabitable property? Here’s what you need to know about this situation and where to find the best lenders to discuss your plans.

Firstly, are you looking for a mortgage on an 'uninhabitable property'?

Home Property Types Uninhabitable Property Mortgages
Pete Mugleston

Author: Pete Mugleston

Mortgage Advisor, MD

Jon Nixon

Reviewer: Jon Nixon

Director of Distribution

Updated: March 18, 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.

March 18, 2024

If you’re looking to get a mortgage on an uninhabitable or unfinished home, there are some important things you should understand about this type of property.

This guide covers all the essential details you need to know about what makes a house uninhabitable. You’ll also learn if it’s possible to get a mortgage on one in the UK, and where to find the expert support you’ll need.

Keep reading for a complete explanation or click on a link below to jump straight to a section…

Can you get a mortgage on an ‘uninhabitable’ property?

Yes, this can be done. But, expect the process to involve some extra effort. Many lenders will not be willing to offer a mortgage on an uninhabitable property. You may have good reasons as to why the house is not up to scratch. Perhaps it’s a ‘fixer-upper’ that needs work and you plan to completely renovate it.

If you deal with the right lenders, you’ll still have home loan options. But it’s worth keeping in mind that each lender will have different views on what they deem to be uninhabitable. And, what types of properties they will and won’t be willing to offer mortgages on.

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Factors that make a property uninhabitable in the eyes of UK mortgage lenders

Here’s a rundown of the typical areas and features that lenders will look at when making a decision on whether they think your house is habitable or not:

• The house is without a kitchen or bathroom.

• There is fire damage to the property.

• Problems with the hot and cold water supply.

• Issues with drainage and toilets.

• It’s not weatherproof or protected from wind and water.

• Potential health risks to anyone living there (asbestos, mould, damp).

• Non-standard roof (flat, felt, thatched, tin) or it needs a new roof due to damaged slate or tiles.

• House doesn’t meet building regulations or complications around solar panel ownership.

• Excessive Japanese knotweed worries.

• No central heating, an issue that usually depends upon the surveyor’s comments (sometimes this will apply with listed buildings).

How to get a mortgage on an uninhabitable property

When trying to get a mortgage on an uninhabitable, derelict, or unfinished property, there are some simple steps you can follow to give yourself the best shot at securing a home loan. First, make an enquiry with us and we’ll arrange for a specialist mortgage broker to contact you who can help with:

  • Pulling together as much information as possible about the property you want to buy so, with their assistance, you can identify all the potential red flags lenders might be wary of. This way you can significantly reduce the odds of having your application denied
  • Guiding you on what the specific eligibility criteria mortgage lenders look for with these types of properties and establishing what other documentary evidence will be required
  • Finding the best mortgage lenders who have previous experience with uninhabitable properties and preparing your application for submission

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What to do if you’re also purchasing land

If you’re buying an uninhabitable house with land, and the traditional mortgage route is proving difficult, it’s worth exploring bridging loans. This type of short-term interest-only loan can provide quick access to funds, allowing you to go ahead with your plans.

You can use the sale of the land as your exit strategy and use the money from the loan to fix-up particular parts of the home to make it habitable for mortgage purposes.

Available lenders offering mortgages for this type of property

Depending on the state of the property in question and how much work is required, your choice of lenders is likely to be limited. This doesn’t make it impossible to get a mortgage. But, many high street lenders won’t be willing to discuss loan applications for an uninhabitable, unfinished, or derelict property.

That being said, here are a few examples of lenders who are open to offering mortgages for a part renovated property that’s been deemed non-habitable by a surveyor:

  • Newbury Building Society – providing you submit full plans and have already obtained planning permission and any other relevant consents.
  • Earl Shilton Building Society – willing to consider a mortgage application subject to positive comments from the valuer. But, it may need to be a self-build mortgage depending on the level of remaining work.
  • The Loughborough Building Society – open to the possibility, but you’d have to opt for one of their specific mortgage renovation products, which may come with different terms and rates.

The rules between lenders vary and will come down to the specific property and its current state of repair. If you want to see your full choice of options, it’s best to discuss your plans with an expert mortgage broker.

Get matched with a broker who specialises in properties needing work

Whatever your end goals for the uninhabitable property you’re hoping to purchase, your best route to successfully obtaining a mortgage is with the help of a specialist broker.

The brokers we work with are experts at dealing with complex properties that are unfinished, derelict, or simply require some extra work put into them. Our free, broker-matching service means we’ll quickly assess your property and circumstances, then pair you up with an expert advisor.

Just call 0808 189 2301 or make an enquiry. We’ll set up a free, no obligation introductory call between you and your ideal broker today.

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FAQs

This process will involve using a valuer appointed by the lender and it isn’t an exact science. Typically, the estimated value of the land will be calculated based on the location and square meterage.

Then, a potential completion value will be worked out, reflective of nearby similar properties. The amount you’re planning to spend on finishing the property will be subtracted from this to give a rough purchase price. This will all take place in stages with intermittent valuation visits.

Each lender has its own definition of what makes a habitable kitchen. But, the general consensus is that it must have running water, a functional sink, and the space is sealed and contained. As long as you speak with the right lenders, it can still be possible to get a mortgage without a kitchen.

There can be a whole host of reasons and some might be specific to individual lenders. This is why the best way to get a clear view of where you stand is with the help of an expert broker. They can make professional judgements and direct you on the reasons why certain lenders believe a property to be unsuitable for a mortgage.

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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!

Read more about Pete

Pete Mugleston

Mortgage Advisor, MD

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