Non-Standard Construction Mortgage

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The traditional image of homeownership and mortgages is based on a typical scene – a house with brick walls, tiled roofs, and strong, familiar foundations. But not all dream properties look or are made in the same standard way. For those who want something different from the ground up, funding may not come from the same high street lenders that homeowners typically go to.

Non-standard construction has as many advantages as it does disadvantages. In this article, we will go over the challenges that come with a non-standard construction, including property types, why mortgage lenders often tend to shy away, and how you can achieve your dream non-standard construction mortgage.

What are non-standard construction properties?

It’s quicker and easier to outline what a standard construction property and mortgage is. Standard construction consists of:

  • Walls – Brick or stone walls as exterior walls for insulation and protection.
  • Foundations – Concrete foundations ensure the stability of the house.
  • Roof – A tiled roof, or a slate roof, for weather protection.

Anything built outside of these traits ranks among non-standard properties.

Non-standard construction revolves around property types built with different construction methods and building materials. Common examples of non-standard construction properties consist of:

  • Timber Frames and Steel Frames – Homes are typically not built with wood or steel framework for structural support. Nonetheless, these materials provide advantages others don’t. Wood, for example, has high insulation ability and requires less time to use in construction. Steel frames provide high strength and durability, making them resistant to high winds and even seismic activity. Nonetheless, construction using these materials requires specialism.
  • Concrete – Concrete homes can either be prefabricated with concrete panels that have been made off-site or brought to and poured on-site. Prefab concrete is consistent, and cuts a lot of time out of construction, whereas poured concrete allows for high design flexibility.
  • Thatched Roofs – Thatched roofs are reminiscent of the English countryside, and add both charm and weather resistance to the property. Water damage is a concern, which is why construction is done by experienced thatchers.
  • Listed or Historic Buildings – These buildings are protected by the government, and have high restrictions on the things that can be done with them. Historical integrity is key here.

Why do some mortgage lenders shy away from non-standard construction mortgages?

A non-standard construction mortgage is seen with some suspicion by typical high-street lenders for multiple reasons:

  • Higher Risk – The risk involved with financing a non-standard construction mortgage is considered much higher than with a standard construction mortgage. This is because traditional lenders aim to prioritise stability and predictability. They may see the new construction as being potentially less stable than the proven and standard property types.
  • Resale Considerations – Lenders will want reassurance that the property can be resold if you default on the mortgage. This will allow them to recoup their investment, but non-standard construction property might attract a much smaller niche of buyers.
  • Specialist Knowledge Required – The condition and value of non-standard construction properties require surveying by specialist surveyors and builders.
  • Insurance Challenges – Insurance can be hard to obtain for non-standard construction properties. The actual challenge that is faced depends on the specific property, but thatched roofs, for example, have an increased risk of fire damage due to the material makeup. This is an element that entirely doesn’t exist for a normal tiled roof.
  • Lending Criteria – Regardless of whether or not your application is attractive, it will always be seen as a risk, and therefore, you can expect strict criteria. You may face higher interest rates, be forced to pay a larger deposit or undergo scrutiny of your finances.

How to Find a Non-Standard Construction Mortgage

The challenges of a non-standard construction mortgage begin with actually getting one. It’s important to understand the following.

Finding a Specialist Lender

As mortgage brokers, When The Bank Says No can confirm that your best option for getting a non-standard construction mortgage is through specialist lenders. Traditional high street lenders are not as familiar with non-standard construction mortgages as specialist lenders who cater to a more niche group of clientele. Some specialist lenders are members of the National Care and Self-Build Association in the UK, for example. These people have extensive experience in funding non-standard construction.

They can be found through many means, but we recommend the following.

Finding a Mortgage Broker

A mortgage broker will always try to help you get the best possible outcome when it comes to finding a mortgage. The consequences of trying to seek a non-standard construction mortgage with expert help could mean you get the worst possible deal or no deal at all.

A mortgage broker’s job is to make contact with specialist mortgage providers across the country, covering different needs and wants, and keeping them in mind for any clients that would match perfectly with them. WTBSN is a specialist mortgage broker, meaning we have access to specialist lenders across the country.

If you’re looking for a non-standard construction mortgage, a broker will be able to not only help you find a lender, but also help you get the best deal that your documentation and promise deserve.

How to prepare for a non-standard construction mortgage?

For a non-standard construction mortgage, a mortgage broker is not the only ally that is essential. You will also need a surveyor.

A specialist surveyor’s main job is to translate the details of the non-standard construction mortgage into a calculation that the mortgage providers can understand. A specialist will understand the nuances of the chosen construction type.

Detailed Structural Survey

When pursuing a non-standard construction mortgage, having clear details of exactly how non-standard the construction is is key. It’s important to consult with a surveyor with specific expertise in the property types you’re constructing.

An experienced surveyor will:

  • Confirm Structural Risk – The risk factor is the number one concern with a non-standard construction house. A thorough outlining by a surveyor that confirms the property meets building codes for your construction type (timber-framed houses, earth construction etc.)
  • Price Analysis – Mortgage lenders want to be secure in the property’s value. A surveyor can assess and give annotated calculations on the construction. The analysis will also outline the unique benefits of the construction, which could be improved energy efficiency, alongside potential drawbacks, like lowered weather resistance.
  • Showcasing Commitment – A high-quality survey versus a standard one is a good signal to lenders. It showcases a serious commitment to the property, which, when proven, is one of the strongest strengths of an application.

Repair Plan

Another fear that comes with a non-standard construction property is the possibility of damage and high repairs. But having a repair plan can mitigate a lot of this fear and reluctance to lend.

  • Confidence – A repair plan will engender great confidence in your project. A surveyor will identify any existing issues, as well as potential issues, and therefore have a comprehensive guide on what would likely be areas of their concern.
  • Informed Budget – By taking into account any damage that is already present, you can devote a budget to make the repairs. For any elements of the non-standard construction that raise concern, you can either put aside money as a contingency or devote a sum to take preventative measures to those areas. For example – weatherproofing thatched roofs to ensure they do not suffer in high temperatures, where fire damage is most likely to occur.

Conclusion

Overall, attaining a non-standard construction mortgage is not out of reach. It requires strong support from both a specialist surveyor and mortgage brokers. Remember, a mortgage broker can help far beyond just finding a lender, but also help you put together a plan not only to get a mortgage but the best deal available.

FAQ: What are examples of non-standard construction properties? 

Non-Standard Construction Type Purpose Success Factors Specific Examples & Benefits
Passive House (Timber Frame) Extreme energy efficiency Airtight construction, advanced insulation, and heat recovery systems minimise heat loss/gain. Passivhaus-certified homes in Germany consume up to 90% less heating energy than average homes.
Floating Home (Steel/Concrete) Waterfront living Buoyant foundations allow the home to rise and fall with water levels, adapting to changing tides and floods. Provides a unique and close connection to the water, ideal for those seeking an alternative lifestyle.
Rammed Earth Home Sustainable living, natural thermal mass Thick earth walls provide excellent thermal insulation and regulate indoor temperatures naturally, reducing the need for heating/cooling. Earthships utilise rammed earth walls and passive solar design for off-grid living in harsh climates.
Straw Bale Home Eco-friendly, exceptional insulation Straw bales offer superior insulation and breathable walls for a healthy indoor environment, using a renewable resource with a low carbon footprint. A straw bale home in the UK was built in just 18 days and boasts excellent energy efficiency.

 

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Emma Jones
Emma Jones
Emma began her career in Lloyds Banking Group, first in the unsecured & secured loans department at Halifax and later as a mortgage advisor at Lloyds. During 9 years in these roles and a further 2 years at Yorkshire Building Society, Emma was able to observe the impact of the recession, and how the banks let their customers down by denying loans and mortgages. Wanting to be a driving force for change, she stepped into a market advice role where she has been able to help clients when others couldn’t. Identifying a gap in the mortgage space, Emma went on to establish When the Bank Says No. As a keen property investor, she has been the focus of features in publications including The Sunday Times and This is Money. Emma’s greatest joy is overcoming the low expectations of their customers, many of whom have all but given up on getting a mortgage due. One thing Emma has learned through her own personal struggles is every client must be treated like a human and understood better by advisors and lenders in the industry. “We all have to navigate life events which can ultimately impact your financial status. It shouldn’t mean dreams of homeownership or business growth should have the breaks applied”. Emma and her team’s passion for helping people overcome the challenges they may face when applying for a mortgage have fuelled the success of When the Bank Says No.

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