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Non-Standard Construction Mortgages

Expert guidance on getting a mortgage for a non-standard construction property

No impact on credit score

Pete Mugleston

Author: Pete Mugleston - Mortgage Advisor, MD

Updated: August 16, 2021

’Non-standard’ construction covers a huge category in the property world. Basically, any building not made of brick and mortar would be described as non-standard, which could be anything from a rural cottage built out of clay, to a penthouse in a steel and concrete high rise.

In this piece, we’re going to cover non-standard construction mortgages -how they work, the different kinds, and how to get one.

What is a non-standard construction mortgage?

You might need a non-standard construction mortgage if you want to buy a property which is constructed out of something other than bricks and mortar. In the world of many mortgage lenders, a ‘standard’ property is built from brick, has a roof that is tiled and concrete foundations. As far as they’re concerned, everything else is ‘non-standard’.

As such, the ‘non-standard construction’ category covers a huge variety of cases, including

Can I get a mortgage on an unusual construction property?

Yes, there are specialist lenders who offer non-standard construction mortgages.

Categorising things into ‘standard’ and ‘non-standard’ is a way for lenders to mitigate their risk. So as a general rule, non-standard properties are considered riskier and thus harder to finance.

But, as you can imagine, non-standard properties are not equally reliable, and every lender tends to have its own criteria, favouring certain non-standard properties over others.

In fact, there are plenty of unusual properties that are, from a structural point of view, just fine. This doesn’t mean, however, that a risk-averse lender will offer you a mortgage for a non-standard construction house if it violates their criteria in some way. You may have to look further.

What else do I need to know about non-traditional construction mortgages?

Customers in the market for non-standard construction mortgages should also be mindful of the following…

Maintenance is important, can be a dealbreaker, and can cost more

Listed buildings aside, many types of non-standard construction require more maintenance or specialised treatment that can cost more. For example, thatched roofs need to be completely replaced every 30 years or so.

A certain amount of attention is paid to maintenance, in many non-standard properties improper maintenance can lead to damage over time that seriously diminishes the value of the property – another reason you’ll want a survey before applying for a non-standard construction mortgage.

You may be able to convert a non-standard construction into something more mortgageable

Certain types of property can be modified by either moving them into the ‘standard’ category or significantly reducing the amount of structural risk associated with them.

This is common, for example, with certain types of steel framed house, which can be reinforced, thus making them safer. This is often done as part of a certified repair scheme and, depending on the property, can be very expensive.

If you buy a non-standard property, selling it later may be more difficult

Just because you manage to get a mortgage on a non-standard property, doesn’t mean that a potential buyer later down the line will be able to do the same. In a much smaller lending market, eligibility is particularly important, and lending criteria can change over time.

Insurance might be more difficult or expensive

Insurers tend to treat non-standard construction in a similar fashion to lenders. You may not get the competitive premiums that you’d get on a standard property.

Then again, there are specialist insurers out there who better understand the specific type of property better and who can offer you a better deal. The good news is that the expert brokers we work with know who they are and have a great working relationship with them.

The valuer’s comments can make or break the deal

When lenders are less confident in their understanding of a property, many of them will rely more on the comments of the valuer than they would on their usually defined criteria. This means that mortgages on non-standard construction are often treated on a case by case basis.

It’s also very likely that the lender will want more information than they’d get in a normal survey. For example, if the building is listed – they’ll probably want to see a specialised Listed Building Survey. If the initial survey reveals that the building might contain asbestos, or have an unusual frame, they’ll want to see a more detailed structural survey.

Non-standard construction mortgages aren’t too dissimilar to standard mortgages

Non-standard construction mortgages aren’t too dissimilar, from a practical point of view, then mortgages for houses of a regular construction.

The main difference, really, is that mortgages on non-standard construction are seen as a higher risk. As such, lenders tend to offer them at more onerous terms – lower LTVs, higher interest rates and stricter affordability requirements are not uncommon.

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What other types of non-standard construction houses are there?

Houses build from the following materials are also considered ‘non-standard’ or ‘non-traditional’…

‘Clay lump’

Clay lump is most associated with houses in Norfolk, and was very popular between 1700 and 1900.

It’s a form of earth construction, using clay-rich materials. Sadly, many clay lump buildings haven’t been very well maintained, and the ones that are still standing are often patched together with more modern parts, such as cement and brick.

‘Cob’

Cob is another old English style of construction that was particularly popular in Southwest England and Cumbria.

It typically uses a clay mix, in which crushed flint or sand is added to give strength and volume. It’s seen something of a resurgence lately as a green building technique.

‘K Lath’

‘K Lath’ is a kind of reinforced mesh, used to reinforce cladding and stucco walls.

Though ‘K Lath’ is a proprietary product, the term is now used to describe a range of reinforced lath construction techniques.

Non-standard construction mortgage lenders: which are the best?

As a general rule, there are no lenders that are ‘best’. Like we mentioned earlier, it really depends on the profile of the applicant, and the property in question.

  • Santander is open to financing steel framed property, which is more subject to the valuation. With ex-local authority flats, Santander don’t set any limits on the height that they’ll lend on (assuming the property passes an inspection)
  • Halifax takes a more cautious approach that excludes certain kinds of pre-cast reinforced concrete, and properties in which frame cavities have been filled.
  • Nationwide won’t lend on anything above 5 stories (unless it’s based in London).

Furthermore, the brokers can arrange non-standard construction mortgages with the following lenders…

  • Natwest
  • Barclays
  • HSBC
  • TSB
  • And many more

Given that there are a number of mortgage providers who will lend on these properties, seeking advice from a whole-of-market broker is recommended. This is the best way to ensure you will end up with the most favourable deal that is available to you.

Why is getting a non-standard construction mortgage more difficult?

Lenders are always looking at the resale market, in the instance that a buyer defaults on their repayments and the bank is forced to resell the property. Seeing as there is less demand, lenders are worried that they’ll not be able to recoup their losses if forced to resell the property.

To a lesser extent they’re also worried about a lack of maintenance leading to depreciation in price.

How do I get a mortgage on a non-standard construction property?

The best way to kick off your mortgage application is by seeking advice from a whole-of-market broker, like the ones we work with.

At the end of the day, understanding these differences in lender criteria is the difference between getting the mortgage or not.

Some lenders blanket refuse to lend on certain properties that should really be fine. Other lenders treat their criteria more like guidelines and care more about the valuation and survey of the property.

What this means is that picking the right lender is often what decides whether your application is successful. Get in touch and one of the expert advisors we work with can help you find a lender more sympathetic to your circumstances.

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Can I get a mortgage for a non-standard construction property in Scotland?

Yes, this is possible, although it may prove more difficult than getting a non-standard construction mortgage in England and Wales since fewer lenders offer mortgages in Scotland.

The non-standard construction lenders which do operate north of the border tend to have postcode restrictions in place, so it may prove difficult to secure a mortgage on an unconventional property in the Highlands or away from the mainland, for example.

If you also have bad credit, this can add another complication to a non-standard property mortgage, given that there will be fewer providers to choose from. For example, let’s say you want to get a mortgage with a debt management plan against your name. You will need to find the lender best positioned to help customers with this specific type of credit problem.

Some high street lenders might even turn you away because of this, but throw non-standard construction into the mix, and your choice of approachable mortgage providers is suddenly much slimmer.

In niche lending territory like this, a specialist mortgage broker for bad credit and non-standard construction is essential to ensure that you end up with the most favourable rates available.

Speak to an expert if you’re buying a non-standard construction property

If the place that you’re looking at is of unusual construction (or you have a strong suspicion that it is), it’s worth speaking to a mortgage advisor early into the process.

They help people to arrange mortgages on non-standard construction houses and can quickly help you determine how realistic your odds of getting funding for the deal are. This may save you a lot of hassle and wasted valuation and application fees.

A whole-of-market broker can access lenders that are not publicly available. A great broker understands the many types of construction, and what lenders are more sympathetic to them.

As such, if there’s a mortgage out there for you. The brokers we work with can find it for you, and at the most competitive rate possible.

They know in advance what lenders have financed this sort of thing in the past and can help you tailor your application, ensuring that the lender is happy and that you get approved, the first time around.

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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 OMA of course!

Read more about Pete

Pete Mugleston

Mortgage Advisor, MD

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FCA disclaimer

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

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