Why Do Lenders Treat Steel Frame Houses Differently?
Mortgage lenders assess risk based on the long-term durability and saleability of a property. Steel frame houses, particularly those built in the mid-twentieth century, raise concerns about corrosion of the steel skeleton, the quality of the cladding, and the overall structural integrity as the property ages. Because fewer buyers can obtain mortgage finance on these homes, lenders also worry about reduced demand in a repossession scenario.
BISF homes — the most widely encountered steel frame type — were built between the 1940s and 1960s and are readily identifiable by their distinctive upper-storey steel panel cladding. Lenders that will consider these properties typically require a structural engineer's report confirming the steel frame remains sound and free from significant corrosion, and that cladding panels are intact and weathertight. Without this evidence, most lenders will simply decline to lend.
NHBC (National House Building Council) warranties do not exist for most of these older steel frame properties, which removes one of the usual comfort mechanisms lenders rely on. This places the burden of evidence entirely on the structural survey, making the choice of surveyor critically important.
Which Lenders Will Remortgage a Steel Frame House?
High street banks including Barclays, NatWest, and HSBC will typically decline applications on steel frame construction. However, a number of building societies and specialist lenders will consider these properties on a case-by-case basis. Lenders such as Nationwide, Halifax, and certain regional building societies may accept steel frame homes subject to a satisfactory specialist structural survey and valuation. Criteria vary significantly between lenders, and what one accepts another will decline.
Specialist mortgage lenders and some buy-to-let lenders have more flexible criteria for non-standard construction. These lenders understand that steel frame homes can remain structurally sound for many decades when properly maintained, and they price their risk accordingly. Interest rates on these products may be slightly higher than standard rates, reflecting the additional complexity.
Because criteria change frequently and are not always published, a specialist remortgage broker is the most effective route to identifying which lenders are currently active and what their requirements are. Attempting to approach lenders directly risks leaving footprints on your credit file without a realistic prospect of success.
