Remortgage Non-Standard Construction

What Is Non-Standard Construction?

Non-standard construction refers to any building method or material that falls outside the traditional approach of brick or stone walls with a pitched tile or slate roof. These construction types became particularly common in the UK during the post-war housing boom of the 1940s, 1950s and 1960s, when there was an urgent need to build homes quickly and cheaply. However, non-standard methods are also found in modern builds, including timber frame homes and properties with steel-frame structures.

Common types of non-standard construction in the UK include:

• Prefabricated concrete (PRC) — Properties built using precast reinforced concrete panels. Examples include Airey, Reema, Unity, Wimpey No Fines, Cornish, Woolaway and Boot houses. Many of these were originally built as council housing.
• Steel frame — Homes with a structural steel framework, such as British Iron and Steel Federation (BISF) houses. The steel frame is typically clad with concrete panels or other materials.
• Timber frame — Properties where the structural load is carried by a timber framework rather than masonry walls. Timber frame construction is increasingly common in new builds, particularly in Scotland.
• In-situ concrete — Homes where concrete was poured on site into formwork to create the walls, rather than using precast panels or traditional brickwork.
• Metal-clad or corrugated iron — Properties with external cladding made from metal sheets. These are more commonly found in rural and agricultural settings.
• Cob, wattle and daub, or earth construction — Traditional methods found in older properties, particularly in the south-west of England and parts of Wales.
• Flat roof construction — While not a wall construction issue, a flat roof on the main dwelling rather than just an extension is considered non-standard by many lenders.
• Straw bale or hempcrete — Modern eco-friendly construction methods that are growing in popularity but remain outside the mainstream for lending purposes.

Understanding exactly what construction type your property falls under is the essential first step when planning a remortgage. Your title deeds, original building plans, or a surveyor's report can help you confirm this information.

Why Lenders Are Cautious About Non-Standard Construction

Lenders assess properties primarily as security for the loan. If you were to default on your mortgage, the lender would need to sell the property to recover the outstanding debt. This means they are concerned with how easy a property would be to sell and whether it will hold its value over the mortgage term.

Non-standard construction properties can raise concerns for lenders for several reasons:

Structural longevity

Some non-standard construction methods have known issues with structural durability. Certain PRC house types, for example, were designated as defective under the Housing Defects Act 1984 because the concrete panels were found to deteriorate over time, particularly where steel reinforcement was subject to carbonation and corrosion. Lenders are understandably cautious about properties where the long-term structural integrity may be in question.

Resale difficulty

Properties with unusual construction types can be harder to sell because the pool of potential buyers is smaller. Many buyers are put off by the perceived risks or the difficulty in obtaining a mortgage on such properties. This reduced demand can affect valuations and make lenders nervous about the security.

Insurance challenges

Non-standard construction properties can sometimes be more difficult or expensive to insure. Lenders require adequate buildings insurance to be in place throughout the mortgage term, so any difficulties in obtaining cover can become a barrier to lending.

Maintenance and repair costs

Some non-standard construction types require specialist maintenance or repair methods that are more expensive than standard building works. This can affect the property's long-term condition and value, which is a concern for lenders thinking about their security over a 25 or 30-year mortgage term.

Valuation uncertainty

Valuing non-standard construction properties can be more difficult because there are fewer comparable sales to draw on. Surveyors may provide cautious valuations, which can result in a lower loan-to-value ratio than the homeowner was expecting.

Despite these concerns, it is important to understand that many lenders do accept non-standard construction properties, and the market has become more accommodating over time as understanding of these building methods has improved.

PRC Certificates and Defective Properties

If your property is a designated defective PRC type, one of the most important things you can do to improve your remortgage prospects is to obtain a PRC certificate. This certificate confirms that structural repair work has been carried out under an approved scheme, effectively bringing the property up to a standard that most lenders find acceptable.

The Housing Defects Act 1984, later replaced by Part XVI of the Housing Act 1985, identified several PRC house types as defective. These included Airey, Boot, Cornish, Dorran, Dyke, Gregory, Hamish Cross, Myton, Newland, Orlit, Parkinson, Reema, Schindler, Stent, Stonecrete, Tarran, Underdown, Unity, Waller, Wates, Wessex and Woolaway houses, among others.

If your property has been repaired under an approved PRC scheme, you should have received a certificate of structural completion, often referred to as a PRC certificate. This document is extremely valuable when applying for a mortgage because it demonstrates to lenders that the known defects have been addressed by qualified contractors following an approved methodology.

With a PRC certificate in hand, many more lenders will consider your application, and you may be able to access rates that are much closer to those offered on standard construction properties. Without this certificate, your options will be significantly more limited, and you may need to rely on a small number of specialist lenders who accept unrepaired PRC properties.

If your property is a designated defective type but has not yet been repaired, it may be worth investigating the cost of having the work carried out before you attempt to remortgage. The improvement in your mortgage options could more than offset the cost of the repairs over the long term.

A surveyor experienced in PRC properties can advise on the current condition of your home and whether repair work is necessary or advisable. Your local authority may also be able to provide information about approved repair schemes that have operated in your area.

How to Remortgage a Non-Standard Construction Property

Remortgaging a non-standard construction property follows the same basic process as any remortgage, but there are additional steps and considerations that can help ensure a smoother experience.

Step 1: Identify your construction type

Before approaching any lender, make sure you know exactly what your property is built from. Check your title deeds, any previous survey reports, and your buildings insurance policy for construction details. If you are unsure, commissioning a building survey can provide clarity.

Step 2: Gather relevant documentation

Depending on your construction type, you may need to provide specific documentation. This could include a PRC certificate, structural engineer's report, evidence of repair work, building regulations compliance certificates, or specialist insurance documentation. Having these ready before you apply can prevent delays.

Step 3: Speak to a specialist broker

A whole-of-market mortgage broker with experience in non-standard construction properties is arguably your most valuable asset. They will know which lenders accept your specific construction type, what documentation they require, and how to present your application in the most favourable way. They can also save you time by steering you away from lenders who are likely to decline.

Step 4: Get your property valued

The lender will arrange a valuation, and for non-standard construction properties, they may instruct a surveyor with specific experience of your construction type. Be prepared for the valuation to take slightly longer than usual and for the surveyor to examine the property more thoroughly.

Step 5: Arrange specialist insurance

Ensure you have adequate buildings insurance that specifically covers your construction type. Standard insurance policies may not cover all non-standard construction types, and you may need a specialist policy. Lenders will want to see evidence of appropriate cover before completing the remortgage.

Step 6: Allow extra time

Non-standard construction remortgages can take longer than standard applications because of the additional checks and documentation involved. Allow plenty of time and start the process well before your current deal expires to avoid being moved onto your lender's standard variable rate.

Finding the Right Lender for Non-Standard Construction

The good news is that the range of lenders willing to consider non-standard construction properties has expanded significantly in recent years. While some high street lenders remain cautious, there are now many options available if you know where to look.

Building societies

Many regional and national building societies have more flexible criteria for non-standard construction properties than the major banks. Some have specific policies for common non-standard types and will consider applications on a case-by-case basis. Building societies with local knowledge may be particularly helpful if your property type is common in your area.

Specialist lenders

There are lenders who specialise in non-standard construction or who have dedicated underwriters with expertise in unusual property types. These lenders understand the nuances of different construction methods and can often offer terms that mainstream lenders cannot.

Your existing lender

If you already have a mortgage on the property, your current lender may be willing to offer a product transfer to a new deal without requiring a full reassessment. This can be particularly advantageous if your existing lender has already accepted the property type and you simply want to switch to a better rate.

Whole-of-market brokers

A broker who can access the entire market is invaluable when dealing with non-standard construction. They can identify lenders you may not have been aware of and can negotiate on your behalf. Many brokers have established relationships with underwriters at various lenders, which can help in borderline cases.

When comparing deals, look beyond the interest rate alone. Consider the overall cost including arrangement fees, valuation fees, and any specialist survey costs. A slightly higher rate with lower fees might work out cheaper overall, particularly if you plan to remortgage again in a few years.

Tips for Getting the Best Remortgage Deal

Securing a competitive remortgage deal on a non-standard construction property requires some additional effort, but the savings can be well worth it. Here are practical strategies to help you achieve the best outcome.

Maintain your property well

First impressions matter when a surveyor visits. Ensure your property is well maintained, with any obvious defects addressed before the valuation. Pay particular attention to the construction elements that may concern lenders, such as the condition of concrete panels, the integrity of timber framing, or the state of any specialist cladding.

Build your equity

The more equity you have, the better your position. A lower loan-to-value ratio can open up more lender options and unlock better rates. Consider making overpayments if your current mortgage allows, or wait for property value growth to improve your equity position before remortgaging.

Invest in improvements

For certain non-standard types, investing in improvements can transform your lending options. For example, having PRC repairs carried out, replacing a flat roof with a pitched one, or adding an outer skin of brick to a steel-frame property can bring the home closer to standard construction in a lender's eyes.

Keep your credit record clean

With a more limited pool of lenders to choose from, maintaining an excellent credit history is even more important. Check your credit file, correct any errors, and ensure all payments are up to date well in advance of your application.

Consider a product transfer

If your current lender already holds the mortgage on your non-standard property, a product transfer to a new deal with them may be the simplest route. Product transfers often do not require a new valuation, which removes one of the biggest hurdles for non-standard construction remortgages.

Seek professional advice

A mortgage adviser regulated by the Financial Conduct Authority (FCA) who has experience with non-standard construction can guide you through the process and help you avoid pitfalls. Their knowledge of the market and individual lender policies is invaluable when navigating what can be a complex landscape.