Non-Traditional Construction Mortgage

What does non-traditional construction mean?

The most common type of building method is brick walls and tile roofs. In addition to this, similar stone walls or slate roofs, are also considered traditional.

However, over the years, many other types of building method have become available.

Examples of non-traditional build methods include concrete, timber framed, steel framed and properties with thatched roofs.

This can make getting a residential mortgage harder as not all lenders are willing to offer mortgages on properties that are not of standard construction.

The good news is that many will consider them, depending on the scheme, and the valuer’s comments.

For instance, with concrete houses, there have been numerous schemes (one being Wimpey No Fines) over the years which determine when the property was built, and the quality of the concrete build itself.

Some lenders accept some of these schemes and then decline others.

Lenders may also insist that a specialist expert conducts additional surveys, with knowledge of that exact build type.

For instance, for a prefabricated concrete block building, the lender may insist on a full structural survey or specialist report from a professional that inspects concrete.

Sometimes a Mundic Report is required, predominantly for properties based in the West Country.

Do all lenders offer non-traditional construction mortgages?

Not all lenders will offer mortgages against properties that are considered non-standard construction. There are lenders that just stick to bricks / tiles or equivalent.

There are, however, a large number of lenders that can consider properties that have been built using non-conventional methods.

For instance, if you have a timber frame property and are trying to get a mortgage, there are many lenders that can consider his property if the surveyor is happy with it.

The same goes for other non-standard properties, such as thatched or flat roofed houses, or ultra-modern energy efficient properties, such as Huff houses.

Lenders will always rely on the surveyor to give their opinion of whether they believe that the house meets the quality needed for the lender.

As some lenders will decline non-traditional construction properties, without even assessing them, you will want to make sure that you approach the correct lenders.

You should look for a mortgage adviser with experience in non-traditional build methods.

Why is it hard to get a mortgage on a concrete house?

It can be harder to get a mortgage on a concrete property.

The reason is, a number of lenders will not consider the property as security, as they believe that the construction is potentially inferior to that of standard methods, such as brick and tile.

With multiple schemes over the years, concrete properties can fall outside of criteria with most mortgage lenders.

This is due to them believing that the property construction is defective, which puts their collateral at risk.

For instance, some of the older concrete construction properties, such as houses built before 1930, are not popular with a large amount of mortgage lenders.

For the ones that can accept them, they would like you need a specialist report to detail the quality of the concrete, or whether mundic is present. These reports would need to be in line with RICS guidelines.

If the surveyor is happy with the report that comes back, lenders that consider concrete houses, can potentially accept the property as security.

Make sure that you look for a mortgage adviser if you are buying a concrete property.

You should find out from the estate agent, all of the details you can about the construction, so you can pass these onto your mortgage adviser. They can then look for a lender accordingly.

Is it hard to sell a non-traditional construction house?

It may be harder to sell a property that is built using a non-traditional construction method.

The reason is, depending on the property and the build type, the mortgage market maybe more limited, meaning less potential buyers in the market.

For instance, if an applicant’s job situation meant they needed a certain lender to fit their circumstances, but the lender could not accept the property type, this would mean that these applicants could not buy the property.

It would however depend on the property itself as to how limited the mortgage market would be.

Some properties are built using non-traditional methods, but still common enough to be acceptable by the majority of lenders.

Do your due-diligence when you’re buying a property to make sure that you know what to expect when you come to sell it.

Do you need a specialist lender for a non-traditional construction mortgage?

In many cases, you will likely not need a specialist lender for a non-standard construction property, as long as you meet the rest of the lender’s criteria.

For instance, if you were looking at buying a modern concrete property, that was proved to be of high quality, there should be plenty of lenders available to you.

In some cases where the property is deemed to be unattractive, for instance, a flat next to a nightclub, it may mean that a specialist lender is required. Sometimes they will even put a cap on the maximum loan to value, such as 60%.

Give your mortgage broker full details of what you are planning to finance so they can carry out some research to see who will lend to you.

Would it be recommended to get a survey on a non-traditional construction house?

It is usually a good idea to get a survey on a property, even more so for properties that are built in non-traditional methods, if there is any doubt about the build quality.

Ultimately, it is up to you whether you want to pay for a comprehensive report (unless the lender insists).

However, if you choose not to have the property inspected professionally for your benefit, this could lead to expensive problems in the future.

If for instance, you are buying a concrete property, and certain parts of the building have become defective, you would want to know this prior to the purchase.

There are three different types of standard property survey for you to consider when buying a property.

Can you get buy-to-let mortgages on non-traditional construction properties?

It is possible to get a buy-to-let mortgage on a property that is of non-standard construction. However, much like with residential mortgages, not all lenders will offer these, and some will have their own criteria around what type of construction is and isn’t acceptable.

For instance, some may consider flat roof properties, but limiting the flat element of the roof to 50%.

Lenders all have their own rules so find a competent mortgage adviser with experience in buy-to-let mortgages and non-standard construction properties.

Can you get bridging loans on non-standard construction properties?

Bridging lenders tend to have less restrictive rules on which properties that they can accept.

As a result, it is usually not a problem getting a bridging loan on properties that are of a non-traditional build.

The lender would however need to know what your strategy is to exit the bridging loan in the future. This may be to sell the property or refinance it.

If you plan to refinance it in the future, make sure that you explore this at the outset to know whether you have options for standard mortgages, bearing in mind that the property is of a non- traditional construction.

Bridging loans are a specialist subject so you should always take financial advice. Your bridging loan broker will likely be a member of The National Association of Commercial Finance Brokers.

Why use a mortgage broker for a non-traditional construction mortgage?

It is recommended that you use a mortgage broker if you are buying a non-traditional construction property.

The reason is, lenders all have their own rules and criteria making it difficult to keep up with policy.

If your property is of non-standard construction, it is likely that many lenders will not be able to accept it whereas others can.

If the property is concrete, it may be that the concrete grading on the last inspection of the property makes a property unacceptable to some High Street lenders, but not all of them.

This is why finding out as much information as you can about the property build, materials and any past reports, is thoroughly recommended.

You can pass this information on to your mortgage broker so they can talk to lenders and help find you a suitable solution.

Conclusion

There are a large amount of properties in the UK that are not built from standard building methods, such as brick and tile. This can make things a bit more difficult when you are taking a mortgage.

Not all lenders are willing to lend against properties that they consider to be of higher risk.

They are however lots of lenders in the UK that can accept properties built in less conventional ways.

It is important to look for a mortgage adviser that can filter lenders based on the full details of the property construction, and your individual circumstances.

If you would like I NEED ADVICE to match you with a mortgage adviser with experience in non-standard construction properties, please complete the contact form.