Updated: February 14, 2022

Listed Building Mortgages

Wondering if you can get a mortgage on a Grade 2 listed building? Nowadays it's a lot easier! Find out exactly what you need to do next in our in-depth guide.

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Pete Mugleston

Author: Pete Mugleston - Mortgage Expert

Updated: February 14, 2022

Whether it’s as an investment or a dream home, many people are drawn to the historic charm and individuality of listed buildings. For those looking to buy a listed property, however, finding a suitable mortgage lender can prove to be frustrating.

The good news is, we work with a variety of brokers who specialise in sourcing mortgages for listed buildings. By following this guide you’ll have a better understanding of how to secure the funding you need, which lenders can help and where to turn to for the right advice.

Can you get a mortgage on a listed property?

Yes, it’s possible but, perhaps unsurprisingly, it’s not as straightforward as for standard residential homes. Properties classified as listed have a number of implications which can affect the resale potential. This means traditional mortgage lenders can be reluctant to approve mortgages on them.

For example:

  • Restrictive covenants that make it more difficult to carry out repairs, renovations, or remove certain characteristics
  • The age of the property may mean it degrades more quickly than a typical building, potentially leading to faster decline in property value
  • High maintenance costs and the need for specialist traders i.e thatchers, which they will want to be confident buyers can afford

Many lenders will consider non-standard construction and niche properties, such as listed buildings, to be a high-risk investment, as they’re typically more difficult to resell than a standard construction and modern properties.

What types of listed buildings are there?

There are three grades of listed building in the UK, as defined by the National Heritage List for England. The classification is usually awarded to buildings with historic relevance, or special architectural characteristics.

The specific grade will impact the mortgageability of a property, with grade I listed buildings being the most difficult to source financing for, followed by grade 2* and grade 2 listed building mortgage lenders being most accessible of the three.

The three categories of listed building in England and Wales are explained below:

Grade I Places of exceptional national and historic interest, such as castles Makes up around 2.5% of all listed properties
Grade II* Buildings with significant historic or architectural interest that reaches beyond local relevance This type of property makes up about 5.5% of all listed properties
Grade II Any building with special historic or architectural interest and deemed necessary to preserve The vast majority of listed properties (over 90%) fall into this category

Scotland and Northern Ireland use very similar grading systems for their listed properties, but they are categorised as A, B and C, or A, B+ and B respectively.

Whilst some lenders won’t consider a mortgage on any listed property, there are options available with a range of building societies and banks, as well as more niche lenders. It’s important to speak to a specialist broker to improve your chances of finding a lender who will support your application.

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How a broker can help secure the lending you need

Because this is such a specialist area of lending, it’s important to seek advice from a mortgage adviser who has access to lenders willing to consider financing the purchase of listed buildings and an understanding of the specific eligibility requirements.

We work closely with experts in this particular area of mortgage lending, and can help you to access their invaluable advice, to ensure you approach the most suitable lender for your needs.

If you get in touch, we can arrange for a specialist to contact you directly and discuss your requirements in more detail.

Are there any lending restrictions?

Whilst there are a variety of lenders who offer mortgages on listed properties, some of the mortgage terms are likely to be more restrictive.

Each lender has their own criteria, but mortgages on listed buildings often include:

  • A lending cap on the term of the loan – usually 20 – 25 years
  • Lower loan to value borrowing – it’s possible to find 95% offers, but many will cap this at 75-80% of the property value
  • You won’t be able to use any government assisted mortgage schemes to aid the purchase

Are there restrictions on interest-only mortgages?

Depending on your circumstances, it can be possible to obtain an interest-only mortgage on a listed building, although your choice of providers will be more limited and the need for a robust exit strategy / repayment vehicle will be essential to secure the lending you require.

Eligibility requirements

The eligibility criteria for borrowers are similar to that of a standard mortgage, so they will be looking at affordability, credit rating, and your deposit or equity availability.

Deposit requirement

Some lenders, particularly high street banks and building societies will require a higher deposit, with 25% being fairly typical. There are lenders, however, who will offer as much as 95% loan to value (LTV), meaning it’s possible to purchase a listed property with a deposit as low as 5%, depending on the strength of the application.

Things to consider when buying a listed building

Buying a listed building is not as straightforward as a standard residential home. Here’s a number of areas which require focus and consideration, before you agree to the purchase.

Local Authority consent

When you own a listed building, there’s a requirement to gain consent from your local authority before you carry out any alterations to it. This is not necessarily only required for large projects, and can include changes as minor as a new front door.

Failing to apply for local authority consent before carrying out works on a listed building constitutes a criminal offence, so it’s vital to ensure that you understand any restrictions before making a purchase. A mortgage broker who specialises in this type of property can help you to understand the full scope and implications of any restrictions.

Is consent required for repairs?

It’s possible that repairs could also require consent from the local authority, as what is considered a repair can vary from one council to the next. The conservation officer at your local council can help you to determine this.

Has consent been sought for prior changes?

Another thing to be aware of, is that any changes made without consent prior to your ownership, can leave you liable for them. Depending on the nature of these changes, they could be incredibly costly to rectify.

Indemnity insurance can potentially protect you from unauthorised changes made by a past owner, if you discover them prior to purchase, so it’s important to speak to your solicitor about this.

Maintenance costs

Listed building ownership comes with a significant level of responsibility to maintain and preserve it. This means that maintenance costs are usually substantially more than they would be for a modern home. As well as the need to source original materials to preserve the original characteristics, specialist tradespeople are often needed, driving the costs even higher.

You should also be prepared for local authorities to demand immediate repairs to any listed property under section 115 of the Town and Country Planning Act 1971, which they can do at any time. In some cases, grants from Historic England may provide financial support for such repairs, however.

The importance of finding the right surveyor

If you plan to buy a listed building, the importance of finding a surveyor who is experienced in this specific area should not be underestimated. It can be the difference between having your mortgage application accepted or not, as mortgage lenders rely heavily on the surveyors’ valuation when considering mortgage approval.

As each lender has their own panel of surveyors, finding a lender that regularly deals with listed building purchases is therefore essential to the success of your application. An experienced broker like the ones we work with will be able to ensure that you approach the appropriate lender for this type of purchase.

Insurance requirements

Home insurance isn’t necessary for mortgage approval, but it’s important to look into it early in the application process to find out whether your needs and circumstances call for it. Insurance premiums can be very expensive, and in rare cases, listed properties can even be uninsurable, so it’s advisable to have a policy approved before your purchase.

Do you need specialist insurance?

Insurance cover won’t necessarily need to be specialised, however, it’s important to ensure your policy covers the full cost of rebuilding the property. An accredited surveyor can help you to determine which policy is appropriate.

Get matched with a broker experienced with listed buildings

Speaking to a mortgage broker before you approach a lender is always highly recommended. This is particularly the case when it comes to the niche area of buying a listed building.

The experts that we work with are able to offer specialist knowledge surrounding not only the most suitable mortgage lenders for this type of purchase, but also the multiple key considerations of taking on a listed property.

Make sure you have the knowledge, guidance and support you need by giving us a call on 0808 189 0463 or make an enquiry now.

FAQs

Can I get a buy-to-let mortgage on a listed building?

Yes, they’re available through niche lenders, but they will expect you to have experience of maintaining grade 2 listed properties, so it wouldn’t be possible for your first buy-to-let purchase. A specialist adviser will be able to identify suitable lenders for those with relevant experience.

What if I have bad credit?

It’s still possible to get a mortgage on a listed building, but criteria varies from one lender to the next, although specialist lenders are most likely to offer a bad credit finance option. The size and recency of your credit issue can also impact lenders’ decisions.

Certain individuals with bad credit may be approved for a mortgage on a listed building, although the interest rates and deposit requirements are likely to be higher.

Can I remortgage?

Yes, just the same as other property owners, you can look to remortgage at the end of your current deal and consider moving lenders if better terms exist elsewhere.

Can I get a mortgage on a thatched property?

Not all thatched properties are listed, although many will be due to their age. As a property of non-standard construction, however, buying a thatched property can still mean finding a more niche financing option, whether it’s listed or not.

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Pete Mugleston

Pete Mugleston

Mortgage Expert

About the author

Pete, an expert in all things mortgages, cut his teeth right in the middle of the credit crunch. With plenty of people needing help and few mortgage providers lending, Pete found great success in going the extra mile to find mortgages for people whom many others considered lost causes. The experience he gained, coupled with his love of helping people reach their goals, led him to establish Online Mortgage Advisor, with one clear vision – to help as many customers as possible get the right advice, regardless of need or background.

Pete’s presence in the industry as the ‘go-to’ for specialist finance continues to grow, and he is regularly cited in and writes for both local and national press, as well as trade publications, with a regular column in Mortgage Introducer and being the exclusive mortgage expert for LOVEMoney. Pete also writes for OMA of course!

FCA Disclaimer

*Based on our research, the content contained in this article is accurate as of the most recent time of writing. Lender criteria and policies change regularly so speak to one of the advisors we work with to confirm the most accurate up to date information. The information on the site is not tailored advice to each individual reader, and as such does not constitute financial advice. All advisors working with us are fully qualified to provide mortgage advice and work only for firms that are authorised and regulated by the Financial Conduct Authority. They will offer any advice specific to you and your needs.

Some types of buy to let mortgages are not regulated by the FCA. Think carefully before securing other debts against your home. As a mortgage is secured against your home, it may be repossessed if you do not keep up with repayments on your mortgage. Equity released from your home will also be secured against it.

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