Non-Standard Construction Mortgages

Is your dream home slightly out of the ordinary? If so, you may need a special type of mortgage catering to non-standard construction properties.

When you’re thinking of buying something even slightly unusual, it’s worth doing your research before making your purchase.

By following this guide, you’ll better understand these types of mortgages, how to find the best lender and where to look for any advice or guidance you may need.

Read on for more information or jump to the relevant section via the links below…

Can you get a mortgage on a non-standard construction property?

Yes, you can. However, it may not be straightforward, and you may need to use a specialist lender.

Most lenders will consider you a high-risk borrower because they’ll be worried about your home’s resale potential if they have to repossess it.

Non-standard properties often require extensive maintenance and specific insurance, which can be costly. As a result, there tends to be less demand for them.

Whether your application is accepted or rejected depends on a lender’s specific criteria and the surveyor/valuer’s comments.

Some might turn you down immediately, while others will happily fund your purchase, subject to a property survey.

The best way to know which lender to approach is by getting advice from a mortgage broker specialising in non-standard construction.

How these mortgages work

They work in a similar way to standard mortgages.

When you apply, lenders will still want evidence of your income, earnings, and other personal circumstances. They’ll also check your credit history to see how well you’ve paid back loans in the past.

The big difference is the perceived level of risk.

As the lender views you as a higher-risk borrower, you may have to put down a larger deposit, you could end up paying a higher interest rate, and you’ll probably be subject to stricter affordability checks.

In addition, the lender will almost certainly require you to order and pay for a detailed structural survey of the property, and in some cases, the decision whether to lend or not will come down to the surveyor’s comments.

If, for example, the surveyor says that the thatched roof on your prospective new home is a fire risk, you may be rejected.

What types of property do these mortgages cover?

If a property has walls made of anything other than bricks and mortar, or its roof isn’t made of tile or slate, it’s considered non-standard.

The term encompasses a whole range of properties, including:

• Thatched roofs
• Flat roofs
• High-rise flats
• Houses with walls made of glass or concrete
• Listed buildings
• Prefabricated buildings
• Properties with steel or wooden frames
• Flats above shops
• Barn conversions
• K-Lath homes (constructed with reinforced mesh)
• Houses made with clay lump or cob

This isn’t a definitive list, but it gives you an idea of the type of property that could be a red flag for mortgage lenders.

How a mortgage broker can help you

If you want to avoid the hassle of visiting lenders on the high street or trawling the internet looking for a mortgage provider who may consider your application, you should speak to a whole-of-market broker with specialist knowledge of non-standard construction mortgages.

They’ll know exactly which lenders to approach, and which to avoid, and they’ll be able to negotiate the best rates on your behalf and get access to exclusive deals.

They can also guide you through the whole buying process and save you time and money on wasted applications and valuations.

On top of helping you get the appropriate financing for your home, a broker will also be able to connect you with a specialist insurer who will be able to advise you on the specific insurance you’ll need for your new home.

Insurers have strict criteria for non-standard properties, much like mortgage lenders, so a specialist who understands this niche will be better placed to negotiate a more competitive premium.

We have a network of highly experienced brokers ready and waiting to help you.

Get in touch, and we can arrange for someone specialising in non-standard construction to contact you directly.

Which lenders offer non-standard construction mortgages?

There are many specialist lenders who offer non-standard construction mortgages. Each has its own criteria regarding the type of property they’ll consider lending on.

Some high street lenders, challenger banks and specialist mortgage providers will consider your application, and they include…

• Halifax
• Santander
• Nationwide
• Aldermore
• Skipton Building Society
• Accord Mortgages

Bear in mind that some of these lenders might only consider your application for a mortgage on this property type if you’re applying through a mortgage broker.

Moreover, some mortgage providers might even reject you outright because they view you as too high risk and don’t like the added complications associated with your property.

However, with more and more properties now considered non-standard construction, there are plenty of lenders who’ll happily give you a mortgage.

You may not have as much choice as you would if you were buying a standard property, but you certainly won’t be limited to just one or two providers.

In any case, approaching one of these lenders directly is not recommended. Doing so would limit you to just one set of mortgage deals and increase your chances of rejection.

However, if you apply through a broker, you’d have access to their entire market and boost your chances of quick approval.

Eligibility criteria

Lenders will take a cautious approach to non-standard construction mortgage applications.

They’ll pay close attention to the surveyor’s report when deciding how risky lending on the property would be.

They’ll review the report to determine the building’s structural integrity, the amount of maintenance it will require, its insurability, and its resale potential.

For this reason, it might be a good idea to organise your own additional survey beforehand.

In addition to the above property-specific considerations, you must meet general eligibility requirements to qualify.

These include:

• Affordability: Lenders will conduct a series of checks to ensure that you can afford your mortgage. Most lenders will let you borrow 4.5 times your salary, but some will offer as much as 6 times.
• Credit history: A clean record of paying back loans will improve your chances of getting a mortgage approved. It’s worth checking your credit reports before applying and correcting any errors.
• Employment status: Lenders will consider you a higher risk borrower if you’re not a salaried employee, for example, if you’re self-employed or run your own business. That doesn’t mean you won’t be accepted. You may just have to provide more evidence.

Deposit requirements

Most lenders offer a maximum loan-to-value of 75% on non-standard construction buildings, which means you’ll need a minimum 25% deposit.

Generally speaking, putting down a bigger deposit will get you a cheaper rate and boost your chances of being accepted by a lender for this type of mortgage.

Connect with a non-standard construction mortgage expert

If you’ve got your heart set on buying a slightly out-of-the-ordinary house, don’t let the potential stress of getting a mortgage put you off.

It may require more time and effort, but an experienced broker specialising in non-standard properties can provide invaluable help.

Give us a call on 0330 822 0505 or make an enquiry and get matched with a broker today.

We hand-pick all the advisors in our network and rigorously vet them on your behalf so you can be assured you’re getting the best advice possible