How To Get a Non-Standard Construction Mortgage

Can you get a mortgage on a non-standard construction house?

Getting a mortgage on a non-construction house can be more difficult, but it’s not impossible, especially with the right specialist broker in place.

The key issues with non-construction properties come from the extra inherent risk to lenders, so you can expect to pay slightly higher interest rates and be subject to a more rigorous application process.

Anything you can do to help mitigate this risk will make it easier for you to get a mortgage. For example, putting down a larger deposit can bring down the cost and open up more options.

These are the criteria lenders will look at when they assess your application:

• Construction type and materials
• Year of build
• Current structural integrity and survey results
• Insurance considerations

The following are some questions you should consider before you make your application:

• What is the construction type of the property?
• Are you aware of any issues related to the property’s construction?
• When was it built?

How a broker can help when purchasing this type of property

A broker is always a worthwhile addition to the mortgage application process, but with non-standard construction mortgages, they are invaluable. Anything that takes you away from a regular mortgage means fewer options, and with that comes higher interest rates and stricter terms.

A broker with experience in non-standard construction homes can address the key issues, helping you identify sympathetic lenders and bypass those looking to make things difficult or charge you over the odds.

A broker can also help navigate any specific requirements relating to your property and help you get together any specialist documentation. If you want a mortgage for a high rise with cladding, for example, your lender may ask for an ESW1 form, or if you’re looking to buy a concrete home, you might be confused about how many different construction methods can impact a mortgage.

Make a quick online enquiry now, and we’ll assess your situation and match you with a specialist broker who can help.

What are the difficulties in getting a mortgage for a non-standard home?

One of the main reasons it’s often harder to get a mortgage on a non-standard construction is that these types of properties can come with complications.

Lenders will need to be assured the property’s resale value is at least more than your current mortgage if you fail to meet your monthly repayments and the home is repossessed.

Below are a few factors lenders will take into consideration before they approve a mortgage:

• Ease of resale: Lenders can be reluctant to lend if you’re looking to purchase a property with complications, such as Japanese knotweed or quirks, because they are often more difficult to resell.
• Lack of maintenance: If a property isn’t maintained, its resale value can fall, which will make lenders wary if you can’t meet your repayments.
• Homeowner affordability: Properties with thatched roofs, which need replacing periodically, can be expensive to maintain. This adds an extra cost to your outgoings, which lenders will see as a potential issue with meeting your repayments.
• Structural issues: If the property has structural issues, such as asbestos or subsidence, lenders might be concerned about its structural integrity and the potential for future problems.
• Insurance: It can be difficult to obtain building insurance policies on non-standard construction properties, and some lenders might require you to have this in place before they approve your mortgage.

Which lenders will consider applications?

Because property type can vary so hugely under the ‘non-standard construction’ umbrella, there isn’t one single mortgage product offered by a defined number of lenders. Plenty of lenders, however, including the high street banks, will be prepared to consider an application; it’s just a case of narrowing the search for your circumstances. Your broker will be able to help with this.

Halifax and Barclays, for example, are open to non-standard construction mortgages on a range of property types, including 100% timber construction homes, thatched roofs, and concrete homes. So is Santander, which will also consider mortgages for converted churches and coach houses.

Barclays does not lend to homes made from defective precast reinforced concrete (PRC), but Halifax may consider it if the property has been repaired through an approved scheme.

If you’re looking to buy a high-rise flat, a lot of lenders have limits on the number of storeys in the building. Bank of Ireland, for example, won’t lend on buildings over ten storeys high, and the Scottish Building Society caps at eight storeys.

Rates for non-standard construction mortgages tend to be slightly higher than average rates for standard mortgages, but having a broker will make sure you find the best deals.

It’s important to remember that these lenders can consider offering mortgages for non-standard construction properties, but there’s no 100% guarantee that they will. All properties, regardless of construction type, will always be subject to the valuer’s comments.

How much can you borrow?

While it’s hard to be specific with this type of mortgage due to the nature of the properties, our calculator can give you an idea of roughly what you can borrow based on your circumstances and the property value.

Keep in mind that this calculator is for illustration purposes only. Your broker will be able to give you a much more accurate idea of what you can borrow.

What is the eligibility criteria?

The difficulty with non-standard construction mortgages is that the property type and construction can be so different from one home to another that it’s hard to apply the same criteria across the board.

In most cases, applications will be assessed case-by-case, with eligibility varying significantly. Flat roof mortgages, for instance, may depend on exactly what proportion of the roof is flat, with some lenders open to entirely flat roofs and others wanting to consider each case on its merits.

• Property type and condition: Lenders will want a comprehensive survey to get a good idea of the condition of the building, an accurate, current valuation and an assessment of any potential future issues. Leasehold properties may also have minimum requirements on the remaining lease term and other criteria, such as ground rent and service charges. High-rise flats with cladding may also be subject to an ESW1 form by some lenders. Although this isn’t technically a legal requirement, some lenders won’t offer a mortgage without it.
• Deposit requirements: To balance the increased risk, lenders should have lower LTV limits than on a standard mortgage across all property types. Whereas a typical mortgage might have a basic 10% deposit requirement, non-standard construction mortgages may require a larger deposit—sometimes up to 25% as a minimum.
• Credit history: Your credit history can impact your eligibility for a mortgage regardless of the property type. But suppose you’re looking specifically at non-standard construction mortgages, where the lending pool is already restricted, and the loan is considered a higher risk. In that case, any credit issues can make it increasingly difficult to get a mortgage. Talk to your broker if you’re worried about your credit history, as they may be able to find you a specialist bad credit mortgage.

Other things to consider

Unusual properties and construction methods can impact finances and plans further down the line, not just at the mortgage application stage. So, it’s important to consider the following implications before deciding whether to acquire a non-standard construction property.

• Valuation: A valuation is an important part of any mortgage decision, but when your new home isn’t run of the mill, it’s even more crucial. Lenders are normally less knowledgeable about unusual property types and rely on the survey and valuation results to inform their decisions. Getting someone on board who understands your house and how it’s made is key, as an undervaluation can be a make or break for your mortgage.
• Insurance: Building insurance is often a condition of a mortgage offer, so it’s something to factor in from the start. Insurance for unusual homes is often more expensive than average because of the higher ongoing risk associated with your property type. Your broker may be able to help you find a good deal with a specialist insurer as they will already have a good knowledge of your home.
• Maintenance: Maintenance is a key issue for non-standard construction properties as they often require much more input – think thatched roofing – to keep them to a good standard. Any neglect in maintenance can show itself in a drop in property value, which could impact your ability to resell or remortgage in the future.
• Resale potential: If you think you might want to resell your property in the future, it’s worth considering whether the property type might limit the pool of potential buyers and make it more difficult to sell. It might be that there is work you can do in the meantime to reduce the structural risk and make the property more sellable, such as reinforcing steel frames.

Can you get a non-standard construction mortgage in Scotland?

Yes, you can. Getting a mortgage in Scotland is very similar to that in England and Wales, but it’s worth noting that overall, there are fewer lenders offering mortgages in Scotland, and some of them impose postcode restrictions, making it harder to get mortgages in some areas of the country than others.

Non-standard construction mortgages are more niche than standard mortgages, and with fewer lenders to choose from, it may be even more difficult to find the right match if you’re buying in Scotland. Having a broker who understands the Scottish market and has specific experience with non-standard construction mortgages will help you find the best deals.

Get matched with a non-standard construction mortgage specialist.

Finding a mortgage broker who specialises in non-standard construction mortgages isn’t always straightforward, but our expert team is here to help.

We look not just at the quality of their work but also consider areas of expertise and relevant experience so the right advisor matches your unique situation.

Make an online enquiry or call us at 0330 818 7026, and we’ll look at your circumstances and match you with an advisor with the right mix of skills and experience to give you the best chance of securing your non-standard construction mortgage.