Getting a Mortgage on a Timber Framed House

Properties with a timber framework are generally cheaper and quicker for builders to construct, but have a reputation for being difficult to get a mortgage on. However, the right advice can make finding the financing you need much more possible.

In this article, we’ll examine why, historically, mortgage lenders were reluctant to approve mortgages on timber-framed homes, but many are now more receptive to this option.

We’ll also highlight the potential pitfalls of getting a mortgage for a timber framed house and provide expert advice on how to avoid them.

Can you get a mortgage for a timber-framed house?

It’s certainly possible, but as many lenders consider them non-standard construction properties, your choice of lenders will be more limited.

A number of factors, such as the build quality of your chosen home, can influence a lender’s decision.

We work with a large network of mortgage brokers who are experts in timber frame mortgages.

They can help you find lenders who are most likely to accept your application and offer the most favourable rates.

What factors will lenders consider that affect mortgageability?

If you’re looking to get a mortgage for a timber-framed house, a lender will look in more detail at the following property-specific areas to try and identify any potential problems when assessing your application:

The type and age of the property

The build quality of timber-frame properties can vary considerably, making this an important factor for lenders. Timber Development UK says most timber-frame properties in the UK were built after 1945.

The build year can be hugely important to the property’s mortgageability, as there are distinct periods of time when the least reliable construction type of the 200 known was predominantly built, such as the period between 1920 and 1965.

As well as an extensive valuation, it’s possible that lenders will also ask you to instruct a timber and damp survey, which could also require you to obtain a full structural engineering report.

If surveyors are not able to access the frame fully, the lender may insist that ‘hidden defects insurance’ is in place, as a condition of lending.

The current condition of the property

Dampness and timber decay are common concerns for the lender, as timber-frame properties are more vulnerable to moisture damage than traditional brick and tile constructed buildings.

Modern timber-framed properties are built to much higher standards than earlier types, using more resilient materials and often adding a vapour barrier between the frame and the inner wall. This is why many lenders consider timber-framed properties built after 1970 to be standard construction.

Older properties are at greater risk of wet and/or dry rot, as well as fire damage, as building standards were less strict when they were constructed.

The expert brokers we work with understand these potential pitfalls, as well as which lenders offer mortgages on timber-framed properties and under what circumstances.

The other materials used in the property

Beyond the building’s framework, some mortgage providers restrict lending based on the type of cladding used. Halifax, for example, will not consider buildings clad with certain precast reinforced concrete (PRC) and will only lend on a timber-framed and clad property if the cavity between the frame and cladding has been retrospectively insulated.

Getting a mortgage for a property clad with other materials, such as metal, plastic, or additional timber, is possible, but it will narrow down your choice of lenders.

Insurability

All mortgage lenders require property insurance to be in place as part of the application process. However, insurance policies covering non-standard properties, particularly timber frame houses, can be difficult to attain, given that most insurers perceive increased fire risk and reduced durability.

A suitable insurance policy for a timber-framed home can be secured through a relevant specialist insurer. The mortgage brokers we work with can assist you with finding suitable insurers.

Low demand

When considering mortgage approval, lenders need to feel confident that they could recoup their investment in the event of the property’s repossession.

Some lenders are therefore concerned by the resale potential of timber-framed properties, given that they are usually in lower demand than masonry homes.

How a mortgage broker can help

Getting a mortgage for these properties can be difficult, particularly finding the right lenders. This is why the shrewdest move you can make, from the outset, is to seek the help of an experienced broker.

Here’s how they can help.

Identifying the right lenders with the best rates

An experienced broker, like the ones in our network, can help you find the most appealing rates from across the market and point you in the direction of lenders most likely to approve your application.

Lending criteria can change all the time, and brokers stay on top of these changes, so they know which lender is most likely to offer you a mortgage at any given time. They can also find the most preferential rates for your circumstances and broker-exclusive deals that could save you money.

Avoiding the potential pitfalls in your application

The brokers we work with are highly knowledgeable about timber-framed properties and know each lender’s criteria.

There are many ways they can help you to secure a mortgage, whether it’s using their knowledge of local demand to reassure the lender of the saleability or advising you which insurance providers will consider your application.

If you get in touch we can arrange for a broker who specialises in timber frame mortgages to contact you directly.

Lender availability

There are various lenders willing to finance this type of property. Each one has its own criteria, but, as discussed above, the property type, age, and condition will significantly impact who will consider your application.

Although property age is an important factor, over 70 lenders are willing to consider timber-framed properties built between 1900 and 1970, subject to certain additional criteria.

For example, HSBC will consider any age of timber-framed property on its own merits; however, they are unlikely to accept one built between 1920 and 1965 due to the inferior vapour barrier used during this period.

Barclays, on the other hand, will potentially consider properties built in this era, unless they have lightweight cladding materials such as asbestos sheet cladding and/or roofs constructed with asbestos tiles or of felt.

This demonstrates the importance of utilising the services of an experienced broker, as the substantially varying criteria between lenders can make financing a timber-framed property a minefield.

Eligibility criteria

Aside from eligibility from the property perspective, there are also personal eligibility criteria to meet that apply to any mortgage:

• Income/affordability: Lenders need to be confident that you can afford the repayments and, where necessary, any building works to be carried out in accordance with the lending criteria.
• Deposit: There is no specific minimum deposit requirement for timber-framed properties, but it may be more difficult to find 95% mortgages, so the deposit requirement will likely be higher than the current marketplace minimum of 5%.
• Credit history: Some lenders will offer a mortgage to applicants with bad credit; however, this will further reduce your options. Most lenders prefer borrowers with a strong credit score.

Are mortgages available for timber-framed extensions?

Yes, it’s possible. However, this is a highly specialist area of lending that is unlikely to be available on the high street. Despite their cost-effectiveness and efficient construction, this type of extension can be harder to finance than brick-built endeavours.

Lenders will often be concerned with the external finish and confident that the addition will add value to your property. From a personal perspective, it’s a key consideration that the added value exceeds build costs.

Planning permission

Whether or not you require planning permission to build an extension will depend on the size and intended location of the extension on your property, as well as the location of your home generally.

If your property is located in a conservation zone or an Area of Outstanding Natural Beauty, planning permission is more likely to be required. It is strongly advisable to consult your local authority prior to making any plans.

Speak to a broker experienced with timber-framed properties

Whatever type of property you plan to buy, or personal circumstances you have, a trained and regulated mortgage broker has the greatest potential of finding you a lender who is receptive to your specific needs.

The highly experienced brokers we work with offer some of the most reliable advice on mortgages for timber-framed properties.

They have access to lenders and deals that are not publicly available, meaning that they can often find an appropriate finance solution, even if you’ve given up hope.

Give us a call on 0330 822 0505 or make an enquiry, and we’ll arrange for an advisor we work with who has the right knowledge in this area to speak to you straight away.