Non-Standard Construction Mortgages:
What You Need to Know

Introduction: Non-Standard Construction Mortgages

While most UK homes are built using standard construction methods like bricks and mortar, many properties fall under the category of non-standard construction. These homes range from modern steel-framed buildings to thatched cottages. In this guide, we’ll cover how non-standard construction mortgages work, how much you can borrow, and how a broker can help you secure the best deal.

Mortgage One has longstanding arrangements with a number of non-standard construction lenders. We speak to every UK Lender and can help with your requirements. Get in touch, we’re here to help.

Can You Get a Mortgage on a Non-Standard Construction House?

Securing a mortgage for a non-standard construction property can be more challenging, but it's certainly possible with the right specialist broker. The additional risk that these properties pose to lenders often means higher interest rates and a more stringent application process. However, offering a larger deposit can help mitigate these risks, making it easier to get approval.

What is a Non-Standard Construction Mortgage?

A non-standard construction mortgage is designed for properties that deviate from the typical brick or stone structure with tiled or slate roofs. Some examples of non-standard construction include:

• Frames: Steel frames or timber frames

• Roofs: Thatched or flat roofs

• Construction types: Concrete, prefabricated houses, or modular elements

• Other: High-rise flats, eco-friendly homes, barn conversions, and listed buildings

These properties will usually be flagged as non-standard in the property details and confirmed through a survey.

How a Broker Can Help

For non-standard construction mortgages, a broker is invaluable. A specialist broker will be able to:

• Identify lenders that are sympathetic to your specific property type

• Navigate any specialist documentation required (e.g., an ESW1 form for properties with cladding)

• Secure competitive rates and terms, which are typically more limited for non-standard properties

By working with a broker, you’ll be able to access lenders who understand the intricacies of your property type.

Challenges in Getting a Mortgage for a Non-Standard Home

Non-standard construction homes come with complications that make lenders cautious. Some common concerns include:

• Ease of resale: Unusual properties may be more difficult to sell, which increases lender risk.

• Maintenance: Homes with special features, like thatched roofs, require regular upkeep, potentially making it harder for homeowners to keep up with payments.

• Structural issues: Concerns like asbestos or subsidence can deter lenders.

• Insurance: Getting building insurance for non-standard properties can be difficult, and some lenders may require it before approving a mortgage.

Which Lenders Will Consider Applications?

While many lenders are open to non-standard construction mortgages, the terms can vary widely. For example:

• Halifax and Barclays: Will consider timber construction, thatched roofs, and concrete homes.

• Santander: May lend for converted churches and coach houses.

• Bank of Ireland: Has height restrictions for high-rise flats, limiting loans to buildings under ten storeys.

Your broker can help narrow down the lenders willing to consider your application, ensuring you find the best match for your needs.

How Much Can You Borrow?

The amount you can borrow depends on the value of the property and your personal circumstances. While non-standard construction mortgages often come with stricter terms, a typical loan-to-value (LTV) ratio will range from 75% to 90%, depending on the risk posed by the property type.

Eligibility Criteria

Non-standard construction mortgages vary significantly based on the type of property. Some of the key criteria lenders will assess include:

• Property type and condition: A comprehensive survey and valuation will be required to assess the property’s condition.

• Deposit requirements: Non-standard construction mortgages often come with lower LTV limits, meaning larger deposits (up to 25%) are frequently required.

• Credit history: Given the higher risk associated with these properties, a strong credit history is important to secure the best rates.

Other Considerations

Before deciding on a non-standard construction property, there are additional factors to think about:

• Valuation: Lenders rely heavily on survey and valuation reports, especially for unique properties.

• Insurance: Buildings insurance for non-standard homes is often more expensive, which can add to your ongoing costs.

• Maintenance: Some non-standard properties require more intensive maintenance, which could impact resale value and future mortgage options.

• Resale potential: Consider the future resale prospects of the property, as its unusual nature may limit the pool of potential buyers.

Non-Standard Construction Mortgages in Scotland

Non-standard construction mortgages are available in Scotland, but with fewer lenders operating in the region, it can be even more challenging to find the right deal. Working with a broker who understands both the Scottish market and non-standard properties is essential for securing the best mortgage.