‘Non-standard’ construction is a significant category in the property market. It describes any building that is not built from bricks and mortar – think things like rural cottages made from clay or penthouses in a high rise made of steel and concrete.
The team at Think Plutus have compiled this guide to non-standard construction mortgages to help you understand how they work, what options are available and how you can get one.
What is a non-standard construction mortgage?
It may be necessary to apply for a non-standard construction mortgage if you hope to buy a property that is built out of anything other than bricks and mortar. For many mortgage lenders, a ‘standard’ property construction involves brick walls, concrete foundations and a tiled roof. For these lenders, anything that deviates from this is ‘non-standard’.
This means there are all sorts of construction types that can fall into the non-standard category, including:
- Thatched roofs
- Concrete prefabs
- Steel frames
- Listed country cottages
- Single brick
- Flats in high rises
- Timber frames
- And many more…
Is it possible to get a mortgage on a non-standard construction property?
In a word: yes! Specialist lenders are available who accommodate non-standard construction mortgages.
By categorising construction types as ‘standard’ and ‘non-standard’, lenders can mitigate risk. Generally speaking, non-standard properties are considered higher risk, which makes them more difficult to finance. However, as there are so many non-standard property types, they cannot be classed as equal in terms of risk. Thus, every lender has its own criteria, with certain non-standard property types preferred to others.
Truth be told, plenty of non-standard property types are, structurally-speaking, very strong and reliable. Even so, if a non-standard construction house doesn’t fully meet their criteria, a risk-averse lender still may not offer a mortgage on it. It may be necessary to seek out a specialist lender.
What else is there to know about non-standard construction mortgages?
If you are considering a non-standard construction mortgage, you should keep the following in mind:
Maintenance can be a dealbreaker, and it may not be cheap
Many types of non-standard construction require special maintenance or treatments that can be expensive. Thatched roofs, for example, must be replaced entirely approximately every 30 years.
In many non-standard property types, failure to keep up with maintenance can cause damage that diminishes the property’s overall value. This is why it’s essential to have a survey carried out before applying for a non-standard construction mortgage, and maintenance may be a key component of any mortgage deal you get.
A non-standard construction could be converted into a more mortgageable property
It’s possible to modify certain property types to move them within the boundaries of a ‘standard’ construction, or at least reduce the structural risk. With certain types of steel-framed house, it is not uncommon to have the frame reinforced to make the construction safer. Often, this is done as a component of a certified repair scheme, which can be very expensive to have done.
It may be difficult to sell a non-standard property later on
You may have managed to obtain a mortgage on a non-standard property, but that doesn’t necessarily mean that another buyer will be able to later on. Non-standard mortgages are a niche lending market and eligibility is particularly important. If lending criteria changes, you may find it very difficult to find a buyer who can obtain a mortgage later on.
Insurance may be expensive or difficult to get
Insurers tend to take a similar approach to non-standard properties as lenders do. The most competitive premiums that you’d see on a standard property may not be accessible. Having said that, there are specialist insurers who are more familiar with non-standard property types and may offer a good deal. Think Plutus can help you find the right insurer for various property types so don’t be afraid to ask.
The comments from the valuer can be all-important
When lenders don’t feel confident about their understanding of a property, they are likely to be more heavily reliant on the comments of the valuer than they would usually be. Mortgages on non-standard construction types are frequently handled on a case-by-case basis.
The lender is likely to want more detailed information than they would get from a normal survey. With a listed building, for example, they will probably require a specialist Listed Building Survey. If there is evidence of asbestos, or the building’s frame is unusual, they will want a more detailed structural survey to be carried out.
Ultimately, non-standard mortgages aren’t hugely different to standard mortgages
Practically speaking, non-standard construction mortgages are not dissimilar to mortgages for houses with a standard construction. The main difference is the perceived level of risk, so with non-standard constructions being seen as more high-risk, you can expect more onerous terms, including:
- Higher interest rates
- Lower LTVs
- Stricter affordability requirements
What other types of non-standard construction houses exist?
The following building materials are considered ‘non-standard’ or ‘non-traditional’ for property construction:
Clay lump houses are most commonly associated with Norfolk, where the material was very popular in the 19th and 19th centuries. It’s a form of earth construction that involves clay-rich materials. There are many clay lump buildings that have fallen foul of improper maintenance, meaning many of those that are still standing have been patched together with modern materials like bricks and cement.
K Lath is a reinforced mesh that is sometimes applied to reinforce cladding and stucco walls. As such, K Lath is a proprietary product, but the term is now often used to describe various reinforced lath constructions.
Cob is another classical English construction style that was quite prominent in Cumbria and the Southwest of England. It typically involves a clay mix wherein sand or crushed flint is added to provide strength and volume. It has been recognised recently as a green building technique, which has led to something of a resurgence.
Which are the best non-standard construction mortgage lenders?
It isn’t particularly helpful to think in terms of which lenders are ‘best’. It really depends on your circumstances and the nature of the property in question.
- Santander has granted finance on steel framed properties, which are more subject to the valuation. Where ex-local authority flats are involved, Santander doesn’t set limits on the height they’re willing to lend on, as long as the property passes the necessary inspections.
- Halifax tends to be more cautious in their approach, excluding certain kinds of pre-cast reinforced concrete, as well as properties that have had their frame cavities filled.
- Nationwide doesn’t lend on anything above 5 stories unless it is located in London.
Think Plutus can help you obtain non-standard construction mortgages.
There are various lenders who will provide a mortgage on non-standard properties, but there will be strict criteria that differs from one lender to the next. As such, the insight and expertise of a whole-of-market broker like Think Plutus are highly recommended. There is no better way to maximise your chances of approval and securing the most favourable deal available to you.
Why is it more difficult to get a non-standard construction mortgage?
Lenders always have an eye on the resale market, because if the buyer defaults on their mortgage repayments the lender will look to resell the property to get their money back. With less demand for non-standard construction properties, lenders worry that they will struggle to recoup their losses if forced to repossess the property.
They are also concerned about the property’s value decreasing due to lack of maintenance in certain property types.
How do I get a mortgage on a non-standard construction property?
The best way to do it right is to seek the advice of a whole-of-market broker like Think Plutus. Our knowledge and experience of the differences in lender criteria could be the difference between getting a great mortgage and being swiftly declined.
Some lenders will blanket refuse a mortgage on certain properties that really aren’t a big risk to them. Other lenders consider their criteria to be more of a guide than a set of requirements, and will pay more attention to the survey and valuation.
Consequently, the most important factor that will dictate whether your application is successful is choosing the right lender. Contact Think Plutus today and we will ensure that you target the lender(s) who will be most sympathetic to your circumstances.
Are mortgages for non-standard properties possible in Scotland?
Yes, there are mortgages available, though it may be more challenging than getting a non-standard construction mortgage in England and Wales as many lenders do not cover Scotland.
Non-standard construction lenders who do cover Scotland often have postcode restrictions, so securing a mortgage on an unconventional property in, say, the Highlands or off the mainland may be particularly difficult. With fewer providers to choose from, it’s even more important to seek specialist advice to find the most favourable rates available.
Don’t buy a non-standard construction property without getting expert advice
If the property you have your eye on is unusual in its construction, or you think it might be, we strongly urge you to speak to a mortgage adviser early on. Think Plutus helps people arrange mortgages on a wide range of non-standard construction properties, so we can quickly help you get an idea of how likely it is that you will obtain the mortgage you need. Our input could save you a great deal of time and money that would be wasted on valuation and application fees, as well as all the stress and hassle that comes with it.
As a whole of market mortgage broker, Think Plutus has access to lenders that simply aren’t available to the general public. We have a strong understanding of all types of construction and we know the lenders that are more likely to be sympathetic to them. This means that if there are mortgage products in the market that suit your circumstances, our help can increase your chances of getting one and make sure it is the most favourable deal available to you.
Our experience with lenders lets us know which of them have financed properties like the one you’re looking at in the past. We can also help you present your application in the right way so that the lender is satisfied and you have the best chance of being approved the first time around.
Speak with a non-standard construction mortgage expert today
If you still have questions about non-standard construction mortgages, the experts at Think Plutus can give you the right advice. Contact us today by phone or by filling out the contact form and we’ll answer your questions.
If you want to start the process, we’ll arrange a consultation and get the ball rolling on finding you the right lender for your circumstances. Let us take the hard work and stress out of the equation for you and ensure you get the best possible deal. For non-standard construction mortgage advice you can trust, Think Plutus.