Can you get a mortgage on a concrete house?
In this brief blog, we will consider if you can get a mortgage on a concrete house and what your options are. Concrete houses are classed as non-standard construction which makes getting a mortgage for them very difficult but not impossible.
Can I get a mortgage on a concrete construction property?
Yes, getting a mortgage on a concrete construction property is certainly possible.
Different mortgage lenders will have different criteria for giving out a mortgage on a concrete construction property and this is why speciaist mortgage brokers are usually required in this sort of situations as they will have experience of what sort of mortgage lenders may be willing to lend to you based on the specifics of your property.
Most mortgage lenders will view concrete construction houses as unreliable security as they cannot be certain that they will be able to sell it and recoup their mortgage without soo much cost to them.
Some concrete construction properties will also be very hard to value due to their unique elements, styling or structural frame.
The main issue for mortgage lenders when considering if to offer a mortgage on a concrete property will be their ability to repossess that property and sell it back without making a significant loss.
In most cases, you will have to put a larger mortgage deposit down in order to get a mortgage on a concrete house.
You can also expect to pay a higher mortgage rate on your mortgage even with the larger mortgage deposit you have put down which should naturally reduce the mortgage lenders loan to value rate and hence the interest rate being charged on your mortgage.
Mortgages on concrete houses may also not be competitive as there may not be too many mortgage lenders who offer mortgages on concrete houses.
In summary, getting a mortgage on a concrete house is definitely possible if you can meet the eligibility requirements of the mortgage lender.
What impacts your eligibility for getting a mortgage on a concrete house?
Type of deposit
The mortgage deposit you put will have a huge impact on if you are able to get a mortgage on a concrete house or not. Most mortgage lenders will want a larger mortgage deposit in order to reduce their loan to value rates on the mortgage and hence their risk.
Type of property
Most non-standard construction mortgage lenders will offer you mortgages with income multiples of around 4.
You will still have to prove your mortgage affordability to the mortgage lender and prove that you can keep up on your monthly mortgage repayments.
If you are self-employed
If you are a self-employed borrower you may be able to get a mortgage on a concrete house but you could find that the mortgage lender may place so much scrutiny on the reliability of your income. You may need a specialist mortgage lender if you are self-employed and a specialist mortgage broker may be able to help you with this.
If you will be 75 by the time the mortgage term ends then you may find that your option of mortgage lenders may also decrease. This is because mortgage lenders prefer to lend to borrowers who will be younger than 75 by the time their mortgage term comes to an end.
Your credit history is also an important factor and if you have bad credit then you mau find it hard to get a mortgage on a concrete house.
If you find mortgage lenders willing to give you a mortgage on a concrete house with bad credit then you may have to put down a larger mortgage deposit and still pay a high mortgage rate.
Why is getting a mortgage on a concrete house hard?
Getting a mortgage on a concrete house may be much harder due to the mortgage lenders unwillingness to risk some of their funds on a concrete property which they may not be able to sell if they have to repossess the property.
There are many concrete homes in the UK and this is due to the affordable housing crisis in the UK back in the 1950s which forced builders to create precast reinforced homes in a bid to increase the number of homes available after the second world war so the returning soldiers and their families would have affordable homes to live in.
Less than 35 years later a lot of problems started to arise with the concrete homes which were built. Many found that the steel structures of their concrete homes were slowly eroding and their structural integrity was gone.
Due to these structural issues, many mortgage lenders decided to limit their lending on concrete properties and instead raised their property survey requirements for structural checks on concrete homes and their mortgage deposit requirement.
Many mortgage lenders did not see precast reinforced homes built with concrete as suitable security for a mortgage.
In this period a lot of concrete homes would have received structural repaired and you may find it easier to get a mortgage on a concrete house which has some history of repairs.
Types of concrete construction methods
Prefabricated reinforced construction isn’t the only method used to build with concrete, there are other construction methods which have been used in the past and are some form of prefabricated concrete construction. They include:
Wimpey No fines is a concrete construction method used for mass-producing a lot of homes under the Ministry of Works post-World War II Emergency Factory Made programme.
Wimpey No-fines construction homes may be classified as a higher risk by the mortgage lender although you will be able to find specialist mortgage lenders who will lend to you on a Wimpey No fine property. You can expect to pay a larger mortgage deposit.
Cornish Units are a type of temporary prefabricated reinforced construction which is famous mostly in Cornwall and the areas around it. Cornish came about after the Second World war and has two subcategories.
Type 1 cornish Units
This will usually have PRC panel walls at ground floor and the second floor will utilise a mansard roof with almost vertically clad tiles over timber trusses.
Type 2 Cornish Units
Type 2 cornish units will usually have pre-cast reinforced concrete external walls over both storeys.
Woolaway Construction builds
Woolaway construction was a builder in the post-war era, They built a lot of Prefabricated construction houses with concrete frames and panels rather than steel. The houses Woolaway constructions built were mainly semi-detached and terraced two-storey houses, or detached bungalows.
Hawksley PRCs look just like a standard brick house which you will have no issue in regards to getting a mortgage for but these hokes actually have prefabricated reinforced concrete as their beams and although getting a mortgage for them can be tough it is certainly not impossible as long as you have a certified repair schemes for Hawksley houses which many major high street mortgage lenders may be willing happy to accept.
Whitson Fairhurst PRC homes
Whitson-Fairhurst homes produced a large amount of prefabricated reinforced concrete homes as a way to plug the housing crisis. These homes are more commonly found in Scotland.
Airey house constructions
Airey house constructions are another builder which came about due to the affordable housing crisis of the post-world war two era. The houses were a type of prefabricated construction houses which had concrete columns reinforced with metal tubing which may have been recycled from military vehicles. Sir Edwin Airey was behind the creation of PRC Airey house constructions.
Unity PRC homes
Unity PRC homes was a home builder in the 1950s. These types of homes will be hard to get a mortgage for because of their many issues including the use of asbestos in the roofing, their steel beam issues and the degradation of the concrete.
The Unity PRC homes were mainly semi-detached or terraced two-storey homes.
During the 1950s, the Hull construction firm R.G. Tarran, builder of the Tarran Prefab, adapted the former method of Pillars of Perth to create the Dorran House, which is most commonly bungalows built from precast panels.
Reema Construction homes
Reema construction homes was a home builder in the 1960s and created the Reema construction method which you can still see in many homes in the UK today. There are two main methods, Reema Hollow Panel and Reema Conclad. Reema Conclad are typically perceived as less risky by mortgage lenders and you may be able to get a mortgage for a Reema construction property but some challenges still exist.
Orlit concrete houses
Orlit construction houses were a design for many homes in the UK put together by Erwin Katona. Orlit hoises were post-war houses which were meant to be cheap to make and very quick to build. They semed the perfect fit for the post-war affordable housing crisis. Getting a mortgage on an Orlit concrete house will be hard and most of these homes have now been destroyed. If you wanted to get a mortgage on an Orlit concrete house you may have to pay down a significant mortgage deposit and may also need to conduct some repair works on the property before the mortgage lender will give you a mortgage offer.
Wates Group PRC builds
Wates Group prefabricated reinforced construction builds were homes built to cater for the post-world war 2 affordable housing crisis and these homes are almost impossible to get a mortgage for as they are plagued with corrosion issues which degrade the concrete and steel being used in the homes. The Wates group PRC builds have now been termed as “defective housing “.
What can you do to get a mortgage on a concrete house?
Depending on the type of concrete house you have or want to buy you may be able to get a mortgage by first conducting a survey to prove to the mortgage lender that there aren’t any structural issues and no visible damage which needs to be taken care of. A royal chattered institute of surveyors may suffice for most mortgage lenders.
You will usually have to do some repair work to a concrete house for mortgage lenders to consider lending to tit and one of the main things you may have to do is remove the concrete blocks and panels and replace them with the standard brick.
The process of getting a concrete house to the point of mortgage readiness will be expensive and cost a lot of money but the upside is that after this work is done the property value may increase and you may be able to get a mortgage with a better loan to value rate.
Some borrowers will even buy concrete houses with bridge loans and then remortgage onto a standard mortgage with a better loan to value rate.
How long do concrete homes last?
Concrete homes can last for atleast 50 years without needing any structural repairs but there have been occurnces where concrete homes have lasted for 20 to 30 years but this has usually been due to the methods or materials used. There are concrete homes in the UK which have lasted more than 100 years.
Can you get a mortgage on a non-standard construction house?
Yes, you can get a motgage on a non-stndard construction house but you may be expected to put down a larger mortgage deposit in order to reduce the mortgage lenders loan to value rate and risk.
Can you get a mortgage on a Reema House?
Yes, you may be able to get a mortgage on a Reema house but this wil likely be with specialist mortgage lenders and you may need to put down a larger mortgage deposit.
What is classed as non-standard construction?
Non-standard construction homes are usually defined by homeswhich are made of anything other than brick or stone walls with a roof made of slate or tile. Anything that isnt made with these materials is classed as a non-standard construction
Can I get a mortgage on a prefabricated house?
Yes, there are mortgage lenders who will give you a mortgage on a prefabricated house but you may have to put down a larger mortgage deposit.
Use a Government scheme
Government schemes help you reduce the amount of mortgage deposit you may need to put down, reduce the price of the property or create a structure that increases your mortgage affordability much sooner than it would have been.
Some of these include first-time buyer government schemes whilst others in this list are accessible to you even if you are not a first-time buyer.
Government schemes are not available to you if you are getting a buy to let mortgage.
The Government schemes include:
- Lifetime ISA– gives you a government bonus of £1,000 if you save a maximum £4,000 a year.
- Help to buy ISA– gives a maximum bonus us £3,000 if you save the maximum allowed of £12,000. Before you get either you should consider which is better. Lifetime ISA vs Help to buy ISA.
- Help to buy equity loan– gives you up to 40% as a 5-year interest-free equity loan. You begin to pay interest at 1.75 % after the fifth year and 1% plus RPI for every year thereafter.
- Shared ownership– You can buy between 25% to 75% of the property initially with a shared ownership mortgage and then buy more using a staircasing mortgage.
- Armed forces help to buy– similar to the help to buy equity loan but specific for the armed forces personnel giving them an increased chance of acceptance.
- Rent to buy– This is the right to buy scheme on which this guide is currently discussing. A different marketing name is just used. Watch out for this when shopping to avoid missing out on eligible properties due to confusion.
- Right to buy– allows you to buy your home at a discount price.
- Preserved right to buy– same as above.
- Right to acquire– similar to the above.
Depending on where you live, you may also be able to take advantage of home buying schemes provided by your local council. Example: In Norwich, the local councils provide the Norwich home options scheme.
Use a mortgage broker for your mortgage in principle
You may want to use an independent mortgage broker to help you get a mortgage on your new home.
Mortgage brokers are important as they can access mortgage products from across the whole of the market in some cases.
This could be over 11,000 mortgage products. This may have some advantages rather than going directly to a mortgage lender.
A mortgage broker will look to understand your financial circumstances and then provide recommendations on which mortgage products may be suitable for you based on your mortgage affordability.
After giving you these mortgage recommendations, most mortgage brokers will seek your consent to apply for a mortgage in principle.
This will allow you to shop for your home as more estate agents and sellers may take you seriously and it will also give you confidence that your mortgage is indeed a possibility before you make a full mortgage application.
Once you have found a home you want to buy and are satisfied with the mortgage offer for your mortgage then the mortgage broker will then look to get you a mortgage offer.
This will come with a key facts illustration document that details the features of your mortgage including how much you will pay per month.
It will also contain information on if there are any limits such as early repayment fees, or annual overpayment limits.
If you are happy with everything you can then go on to secure your mortgage with the help of a conveyancer.
Your conveyancer will manage the legal searches on the property to ensure there aren’t any issues with it.
They will oversee the sales agreement to ensure it is in your best interest, they will manage the transfer of mortgage funds, exchange contracts with the seller or their conveyancer, and set a completion date with the seller or their conveyancer.
This will then bring an end to the conveyancing process, at which point you will receive the keys to the house and move in.
If you need financial advice and you live in the UK then you could contact the Money Advice service over the phone or via chat for impartial advice.
You can also contact the debt charity “Step Change” if you are in debt and need help.