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Trusted Advisors For Concrete House Mortgages

Financing a concrete home isn’t as straightforward as brick-built properties since they fall under “non-standard construction” and usually have stricter requirements as well as higher deposit and interest rates. But don’t let that deter you from getting the house of your dreams.

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Can I Get a Mortgage On a Concrete House?

So, you fell in love with a concrete house and are looking to take out a mortgage for it. We don’t blame you; many concrete houses offer energy efficiency, superior weather resistance, and unique architectural features not found in traditional builds.

While it is possible to get a mortgage on a concrete house, it does come with several challenges. Concrete homes are classified as non-standard construction as they deviate from conventional brick or timber frame structures. Non-standard homes are often prone to structural issues, which can make lenders more cautious when approving mortgages.

When the Bank Says No specialises in navigating this niche market. Our extensive network of lenders allows us to explore options beyond traditional banks and find the right mortgage solution for your needs.

What Is the Ideal Loan-to-Value Ratio for Concrete House Mortgage?

A loan-to-value (LTV) compares the size of the loan you’re applying for to the home’s value. It’s calculated by the total loan divided by the home’s appraised value, then multiplied by 100 to convert the number to a percentage.

So, if the property value is, say, £200,000 and the loan amount is £150,000, the LTV ratio would be calculated as:

LTV = Loan Amount / Property Value x 100

LTV = 150,000 / 200,000 = 0.75 x 100

LTV = 75%

In this circumstance, you’re borrowing 75% of the property’s value and have a 25% deposit.

A 75% LTV is typically considered acceptable by most lenders. But for a concrete home, lenders often might prefer an LTV of 50% to 60% due to the perceived higher risk of non-standard construction.

The lower the LTV, the less risk for the lender, making it more likely to get approved with better terms.

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Why Is It Difficult to Get a Mortgage On a Concrete House?

To understand why getting a mortgage on concrete houses is challenging, we must first discuss how this type of construction came to be—and why it eventually fell out of favour over the years.

Concrete homes began being constructed in the 1950s as a solution to the post-war housing crisis in the UK. World War II had just recently ended, and thousands of soldiers began returning to their families—and with it, the demand for affordable housing.

To meet this demand, builders turned to a construction method known as Precast Reinforced Concrete (PRC). They poured concrete into moulds containing steel reinforcement (rebar), then shipped them on-site to be assembled. It was quick and low-cost, the perfect solution to the housing crisis.

It wasn’t until two decades later that these homes began to exhibit signs of deterioration.

Quality control issues stemming from mass production, coupled with the widespread use of PRC, resulted in reduced poor structural integrity. The steel reinforcement began to corrode, weakening the structure and causing long-term durability problems. This flaw led mortgage lenders to restrict lending on concrete properties

Today, concrete homes are considered “high-risk” because they have a lower market value than traditional brick-and-mortar homes. They also come with high repair costs or insurance issues, making it harder for lenders to resell the property when repossessed.

What Factors Influence My Chances of Mortgage Approval on a Concrete House?

Several factors influence your chances of getting approved for a concrete house mortgage. These include:

Credit History

Mortgage lenders are wary about lending a loan to people with poor credit histories, and this is even further exacerbated with high-risk properties like concrete houses. Having a solid financial profile helps offset the risks associated with non-standard construction.

Employment Status

If you’re unemployed or have recently lost your job, getting approved for a mortgage might be challenging. The same is said for those who are self-employed or have only recently changed employers.

Income

Non-standard construction properties have a loan cap of three to four times your annual income. If you earn less than that amount, you may struggle to find a lender. Moreover, some lenders don’t take into account bonuses and commissions and may only calculate your base salary.

Deposit

Due to the perceived risk of non-standard construction properties, lenders might require a larger deposit compared to a standard home. A bigger deposit can improve your chances of approval.

Structural Condition

If the concrete home has significant issues (e.g., scaling, cracking, erosion), lenders might hesitate to approve your loan. A property in good condition or with a history of proper maintenance significantly increases the chances of loan approval.

Type of Concrete Construction

Newer homes built with high-quality materials may be easier to approve since they often meet current building standards. The same can’t be said for older concrete homes (like PRC houses) which may require a PRC certificate to prove their structural integrity.

Resale Potential

If your concrete house is easy to sell in the future (due to its condition, location, and appeal), lenders will feel more secure in offering you a mortgage.

Insurance

Lenders often require building insurance as a mortgage condition. This can be a problem because insurance for concrete homes can sometimes be harder or more expensive to obtain, especially if the property is older or has structural issues. If you’re unable to secure insurance, lenders may decline the loan.

Property Height

PRC properties with more than two stories are considered high-risk to some lenders, even if the property appears in top condition.

Age

The age requirements of a concrete house mortgage are similar to any other mortgage. In the UK, the minimum age for taking out a loan is 21. The maximum age varies from location to location and lender to lender. Some banks have a maximum age of 70, while others can go as far as 80.

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What Are the Deposit Requirements for Concrete House Mortgages?

Typically, the deposit requirements of standard construction properties can be as low as 5%.

But since concrete homes are considered non-standard and thus high-risk, most mortgage lenders require a deposit of at least 25% to 35% of the property price. Therefore, it’s common to see an LTV of 65%.

To put the difference into perspective, the maximum LTV of a standard construction property can be as high as 95%.

What Are the Pros and Cons of Getting a Mortgage On a Concrete Construction Property?

Although considered non-standard, taking out a mortgage on a concrete home isn’t necessarily a bad idea. In fact, there are several advantages of taking a mortgage on a concrete house, including:

Affordability: Concrete construction homes are typically more affordable than traditional brick-and-mortar homes, making them a more attractive choice for investors and first-time buyers.
Energy efficiency: Properly built concrete homes have high thermal mass and insulation, preventing drafts and creating an airtight, energy-efficient home.
Fire resistance: Concrete homes are considered fire-resistant, helping to limit fire damage and the spread of flames. Unlike traditional construction materials such as wood and steel, which are combustible, concrete is non-flammable, making it a safer option in case of a fire.
Insect resistance: Concrete homes are resistant to insects, so you won’t have to worry about termites and other wood-eating creatures taking over your home. Concrete doesn’t provide a food source for pests, which can help maintain the integrity of the building over time.
Unique architectural features: Some concrete homes, particularly those that were built post WWII, have eye-catching architectural details that can rarely be replicated in modern homes. This can attract buyers who appreciate the finer details of home construction.
Potential investment opportunity: Concrete homes often offer a lower entry price than brick or stone. This creates an investment opportunity for those willing to refurbish them, increasing both mortgageability and resale value.

On the other hand, these are the disadvantages of mortgaging a concrete home:

Structural concerns: Among the primary reasons lenders hesitate to mortgage a concrete home is the risk of structural damage. Some concrete homes, particularly those that were built with PRC (Precast Reinforced Concrete) and steel frames, are susceptible to erosion and may need regular repairs to keep them structurally sound. The cost of repairs adds up over time, making these homes less attractive to both lenders and potential buyers.
Issues with resale: Concrete homes have developed a poor reputation over the years, and lenders’ hesitance to offer mortgages makes them difficult to sell. Most buyers are looking for long-term properties that retain their value over time, and concrete homes are notorious for doing the opposite. Not many are willing to take this risk, even if the property has no faults.
Limited mortgage options: Due to its status as non-standard construction, you may struggle to find financing options. Even if you do, you’ll likely face higher interest rates and deposit requirements.

Which Lenders Accept Mortgage On Concrete Properties?

High street lenders may consider loans for concrete construction properties, but their acceptance rate is a lot lower than for standard construction properties.

When the Bank Says No has access to a wide network of specialist lenders who are more experienced in handling non-standard construction types. Our team can help you navigate the complexities and find a mortgage solution tailored to your concrete home.

Types of Concrete Construction Methods and Their Mortgageability

The mortgageability of concrete homes depends on their construction method. Here are some of the most common types:

Precast Concrete (PRC Homes)

Precast concrete is created by pouring concrete into a pre-shaped mould, allowing for faster production and construction.

Most PRC homes were developed between the 1950s and 1970s, during a period of housing shortages in the UK. The precast method allowed builders to quickly assemble homes by making concrete parts in factories and then putting them together on-site. It was also cheaper than traditional brick construction, making it a popular choice at the time.

Unfortunately, the rapid building method caused PRC homes to have structural problems like corrosion and deterioration. As such, PRC homes are near-impossible to finance without a PRC certificate proving the house is structurally sound and safe.

Here are the most common types of PRC homes built in the UK:

Hawksley Construction: Designed to resemble traditional brick houses but are actually constructed using PRC beams. The outer layer typically consists of bricks, which can lead to confusion regarding their construction method. These homes are generally accepted by lenders if they have undergone a PRC home repair scheme.
Reema Construction: Popular in the 1940s, characterized by their use of large concrete panels called the Hollow Panel system. These homes often require renovation to qualify for mortgages, although some built in the 1960s may not need extensive refurbishment.
Woolaway Construction Units: Built primarily between 1946 and 1956 and include a variety of home types such as bungalows and semi-detached houses. They utilize concrete frames and panels for rapid construction.
Dorran Constructions: Constructed in the 1950s, Dorran homes feature single-storey buildings with moderately pitched gable roofs.

Insulating Concrete Forms (ICF)

Insulating Concrete Forms (ICF) is the modern variant of PRC homes. As the name suggests, concrete is poured into insulated foams to create energy-efficient, durable walls. Such homes are generally easier to finance as they meet current building standards. And although it still falls under non-standard construction, lenders typically consider ICF houses as low-risk.

Wimpey no-fines Construction

Wimpey no-fines construction is a method developed by the George Wimpey company, designed to provide affordable homes after World War II.

These homes were part of the Ministry of Works’ post-war Emergency Factory Made programme, aimed at addressing the urgent housing shortage. The idea was to create low-cost homes that could be built quickly to house people displaced by the war.

The method used no-fines concrete, which involved mixing concrete with large amounts of air to reduce its weight and improve its thermal insulation. This made the construction process faster and cheaper.

Today, Wimpey no-fines homes face various issues from dampness, structural weakness, and insulation problems. Because of this, Wimpey no-fines homes are more difficult to finance than other types of concrete construction.

Frequently Asked Questions

How long does a concrete house last?

The longevity of a concrete house depends on the type of building material used and the construction method. For example, concrete homes made with PRC may require renovation within 20 to 30 years, while homes made of Insulating Concrete Forms (ICF) or cast-in-place concrete often last 50 and sometimes even 100 years more with proper maintenance.

Is it safe to live in a concrete house?

As long as the home has been properly maintained over the years, it’s perfectly safe to live in a concrete home. Modern concrete homes are designed to withstand various environmental stresses, such as wind, fire, and even earthquakes.

Older concrete homes may have structural issues such as deterioration or corrosion over time, especially if they were built using outdated methods like PRC or Wimpey no-fines, but they’re typically safe to live in as long as they’re properly maintained.

With that said, it’s important to note that older concrete homes are more prone to dampness and moisture problems if not properly maintained. Damp environments can lead to mould growth, which can affect respiratory health.

Can I get a mortgage on a concrete house with bad credit?

Getting a mortgage for a concrete home can be tough even with good credit, and bad credit makes it much harder.

Lenders consider those with bad credit as high risk, so while they may not reject you outright, they may offer higher interest rates, lower loan amounts, and higher deposits (up to 30%) to mitigate those risks. They may also have stricter income and affordability checks.

If you’re planning to take out a concrete house mortgage but are worried about rejection due to bad credit, we can help. Contact us today and we’ll go through everything and discuss what your options are.

What’s a building survey, and why is it important for concrete construction homes?

A building survey is a detailed inspection of a property to assess its overall condition. The survey covers factors like structural integrity, susceptibility to corrosion or decay, insulation, dampness, and adherence to current buying standards.

It basically serves as evidence of the property’s condition, reassuring lenders that the house is structurally sound and mortgageable.

What should I do if my mortgage has been declined due to the property being made of concrete?

It isn’t uncommon for a concrete house mortgage to be rejected, especially since they’re considered high-risk. If this happens, don’t panic and don’t reapply too right away because this may negatively affect your credit score. Instead, reach out to one of our advisors and we’ll help you get your deal back on track if we can.

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