Non-Standard Construction Mortgage

Podcast was accurate at point of publication and is subject to change (May 2023)

What is a non-standard construction mortgage? How do you identify non-standard construction?

A non-standard construction property is a property that’s not been built with what you would class as standard construction. The standard is bricks and mortar with a tiled roof, for example.

Commonly people think of non-standard constructions as concrete buildings and essentially the UK’s glorified sheds, but it could actually be a range of things. Listed homes, properties with thatched roofs, a property with a flat roof, properties over a certain value and homes in flood risk areas can all be viewed as non-standard.

There’s quite a few areas that a lender would deem outside of the norm when it comes securing a mortgage on a property. How you identify it is where we come in. We’ve got a good understanding of what works and what doesn’t work.

Some high street lenders will be perfectly fine to give you a £600,000 mortgage, while others might not, so it’s not necessarily a case of immediately scaling down to the more expensive lenders. It’s all about knowing which lenders are going to be best fit for your circumstances.

What does a prefabricated house mean?

This is often where people come unstuck. You might go on Rightmove and find a property that’s 20% cheaper than all the other properties on a street, for example. You book the viewing and go, only to be told by the estate agent it’s a non-standard construction property.

Typically they’re referring to a PRC home – Precast Reinforced Concrete. These were built post-war for speed, to address the housing shortage. They were never really meant to last but quite a lot of them have. Some of them are past their sell-by date and that’s why lenders are more concerned when it comes to securing a mortgage on them.

Not all properties are the same – two might look very similar but they might be constructed in different ways. One that seems easily mortgageable may not be if you look at the property next door, for example.

Is there a difference between modular and prefab homes?

So essentially modular homes are the 21st century answer to the prefab home – in that you can build a house in weeks rather than months and years. Methods of construction have come along a lot, but there are lenders that still find it a challenge to lend on those properties.

At the same time they’re not very common. Probably, as more modular homes become available, lenders will have to open up their criteria to let people buy them.

If someone owns a prefab home is there anything they can do to improve their chances of selling it?

We’ve touched on the fact that getting a mortgage on a prefab home is potentially tricky – there are ways in which you can repair a prefab property. It is costly, but by repairing the property you no longer have that issue with getting a mortgage.

Although the repair might cost £40,000 for example, not only have you repaired it so it will last, but chances are you will also increase the sale price because it will be easier to mortgage.

How difficult is it to mortgage a non-standard construction property?

I did allude to it a bit earlier in that no two properties are the same. I’ve worked in estate agents in the past and you might be told that a property is built out of concrete – but it’s not as simple as that. It’s what type of concrete.

I have a 10 page document here with 50 or 60 different concrete constructed properties…some of them will be mortgageable and some of them won’t. Some can be mortgaged with high street lenders and some of them won’t be mortgageable at all.

It is quite tricky to know what you’re dealing with unless the seller has had a survey explaining the type of property and how it was built.

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

You can get a Buy to Let mortgage on properties that are non-standard, but you’ll have the same challenges whether it’s on a residential basis for you to live in, or whether you’re buying property to rent out.

You will probably have a reduced list of lenders. As a side note, a lot of lenders are requiring a higher EPC, which most non-standard construction properties probably wouldn’t meet. Before you could legally move a tenant in, you’d probably have to do fairly significant work to the property.

What costs are involved with non-standard construction mortgages?

Generally speaking it will depend on the type of construction. With some common ones, like a Laing Easiform, around 70% of lenders will lend on that including normal high street lenders and high street rates.

One that looks similar might be a Wates constructed property where only two lenders will accept you, you need a 50% deposit and the rates are double those elsewhere. So it is all circumstantial to the property.

How can a mortgage broker help if somebody is looking into non-standard construction?

One thing to highlight is that there is a benefit in buying a non standard construction property – it’s cheaper. You might find that most properties in the area are £200,000 but a nonstandard construction property might be £150,000 – so there’s a reason why people still buy and sell these properties.

In terms of how we can help, we’re local experts. We’ve got many years’ experience between us and we’ve all dealt with non-standard construction properties. So if you’re seriously considering taking that chance to save yourself some money, give us a call well in advance.

We don’t want you to put an offer forward on the property, have it accepted and then find out that it can’t be mortgaged easily. So have a chat with us first.

Your home may be repossessed if you do not keep up with your mortgage repayments.

Most Buy-to-Let Mortgages are not regulated by the Financial Conduct Authority.

Content was accurate at point of publication and is subject to change (May 2023)