Getting a large mortgage on a listed building or an unusual property can be tough. Banks and building societies are increasingly using standardised and automated lending criteria which means that thatched cottages, timber-framed houses and listed buildings can all be difficult to mortgage.
However, there are lenders out there who are prepared to lend on unusual properties.
The Daily Telegraph reports that ‘the high street banks prefer to lend on purpose-built flats, or four-bedroom executive boxes, rather than take a risk on someone who wants to live their lives outside the box.’
“Unusual properties make many lenders nervous,” said Islay Robinson, CEO of London mortgage broker Enness Private Clients. “This is because they want to know that they can sell the property easily if they have to repossess it, and they are worried that listed buildings and other non-standard properties won’t be in such high demand.”
Often, you will have to turn to a smaller lender to secure a high value mortgage on a listed building. One such lender is the Harpenden Building Society which specialises in odd properties and has financed the purchase of medieval houses, thatched homes, converted chapels, barns, lighthouses and a prefabricated German-made Huf Haus.
Head of lending Richard Mason said: “We look at each case individually. The big lenders often have very set criteria, we try to be more flexible, using local valuers who understand the market and can guide us on likely demand for the property.”
A spokesperson for Norwich & Peterborough building society said it is also happy to lend on character properties. “We can help convert an existing building, such as a barn, windmill or chapel, restore a property that has fallen into disrepair, or build a home from scratch.”
Ivan Gould, chief executive of the Buckinghamshire Building Society said that they also try to be flexible. He added: “We will lend on unusual properties up to a restricted LTV, although a lighthouse would probably be a step too far.”
The newspaper says that ‘if you’re struggling to fund your dream purchase, it may be worth speaking to an independent mortgage broker, who can research what’s available across the entire market.’
“We’re often approached by high net worth clients looking to buy unusual homes,” added Mr Robinson, the London mortgage advisor. “Whether a client is looking to buy a thatched cottage or converted church we can often find a lender prepared to help.
“In addition, we have access to a wide range of lenders that can help with self-build or renovation projects. Again, many smaller regional building societies can often help with the funding of this type of property,” he added.
Finding a mortgage isn’t the only challenge when buying an unusual property. You also have to insure it and many experts recommend that you can secure affordable and comprehensive insurance before you complete the purchase.
Insurance specialist Michael McGinty told the Telegraph: “This is a niche market which means your premium should be more expensive than on a standard household policy. If you’re buying a thatched cottage, it [your insurer] may want to know when the thatch was last checked, and what measures you have taken to prevent fire. Some insurers may cover listed properties, but the older it is, the narrower your choice.”