Non-Standard Construction Mortgages

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Non Standard Construction Mortgages

Paul Holland talks us through non-standard construction mortgages.

How do you identify non-standard construction?

You would usually gain that information from the estate agent. Standard construction is considered as a property that’s brick built with a tiled or slate roof. Anything outside of that is ultimately potentially going to fall within that non-standard construction bracket.

If you don’t confirm that the property is non-standard construction early on then it could potentially cause delays further down the line. Ultimately it could lead to a decline from the mortgage company, if the construction type hasn’t been highlighted.

Is it difficult to get a mortgage on a non-standard construction house?

The things you need to look for with a property are a thatched roof or flat roof – anything that isn’t a pitched roof with tiles or slates on it. A listed building could also potentially cause issues, or being in a flood risk area.

Other unusual construction properties include prefabricated concrete homes such as Cornish Unit houses. These can be red flags in getting mortgages.

Generally, you could potentially get a mortgage on those properties as long as it’s highlighted at the right point. Use a good, whole of market broker to place your application with the most relevant lender for that particular type of non-standard construction.

Every lender has different criteria for construction types and we will be able to find the most appropriate one. We manage the mortgage company’s expectations ahead of the application. It’s best that we do a little bit more legwork upfront. We speak to the lender and potentially even the surveyor about the specifics and any potential pitfalls.

Can you get a Buy to Let mortgage on a non-standard construction?

In fact, the same rules apply for residential or Buy to Let when it comes to non-standard construction. Outside of the construction type, you need to remember that you might need a larger deposit and the rental income is the driving force for affordability, rather than your personal income.

What is a prefabricated house and how do you tell if a property is a prefab?

Prefabricated homes are usually properties that have been erected quicker than normal. The materials used to build the property are generally classed as a ‘subpart’ in comparison to a conventional build. They’re more commonplace overseas, but you do see them in the UK. They’re essentially flatpacked homes made from big concrete slabs.

The devil is in the detail – when was it built, what were the regulations at the time, what are the specific build models? Lenders will use all of those factors to determine whether or not that prefabricated house is a higher risk to them than a conventionally built property.

As an example of something that I’ve personally tripped up on with non-standard construction was a purpose built flat. From the outside it looked like a conventional build. The face of it was brick and the top looked to be cladding. But when the surveyor checked the build particulars it turned out that behind the cladding sat timber framing. The application was deemed to be outside of the lender’s criteria. The estate agent and the buyer weren’t aware of the build of the property and it wasn’t until the application was in that it came to light.

If you ask the right questions and do your research you should highlight those factors a little earlier on.

Can I get a mortgage on a concrete-built property?

Concrete, timber-framed, steel-framed homes and barn conversions are all unconventional builds that will generally flag up issues with different lenders. Whether or not you can get a mortgage will depend on the finer details and how they marry up with the lenders’ criteria.

Important things are the year of construction, the regs that were in place at the time and the various insurances and guarantees that as a result of being built by a developer.

Value, loan to value and your deposit are all important too. In answer to the question, all of those properties will have a mortgage on them somewhere in the UK. And some of them will have been declined by certain lenders. So it’s all a case by case basis.

What costs are involved with non-standard construction mortgages?

There aren’t any obvious additional costs. It’s not like you put an application in and because it’s non-standard construction you get a larger fee.

Potentially someone might choose to pay for a more comprehensive survey, to have a little bit more reassurance about the purchase. To make sure the surveyor does a more comprehensive job, they might choose to upgrade their basic survey to a home buyer survey or even a building survey. This comes at a larger cost than a basic valuation.

What other advice do you have on non standard construction mortgages?

Someone that isn’t qualified or hasn’t got extensive knowledge in this arena will have a rough time placing a client. So it is worth hiring the right professionals with experience in this space. We do the legwork up front to make sure the transaction goes smoothly from start to finish.

Your property may be repossessed if you do not keep up with your mortgage repayments. The Financial Conduct Authority does not regulate some Buy to Let Mortgages.