Secured Loan on a Non-Standard Construction Property

Common Non-Standard Construction Types

Airey houses were designed by Sir Edwin Airey and built by local authorities in large numbers after World War II. They use pre-cast concrete columns and spandrel panels, and are one of the most common non-standard construction types in the UK. Approximately 26,000 were built, primarily in rural areas and small towns. The concrete in older Airey houses can deteriorate over time, and many have been repaired or re-clad. Lenders who accept Airey houses may require a PRC certificate confirming the property has been repaired to an approved standard.

Wimpey No-Fines properties use in-situ poured concrete (aggregate and cement without fine sand) in a no-fines technique that creates a cellular structure. Approximately 100,000 were built in the UK. They are generally considered more durable than some other concrete systems, but lenders still apply special assessment criteria.

Timber frame properties are among the most common non-standard types in modern new builds — many contemporary homes are timber frame — and are generally more widely accepted by lenders than older concrete systems. Steel frame properties are also becoming more common and are similarly assessed. Lenders distinguish between modern timber and steel frame (broadly acceptable) and older or unusual systems (requiring more detailed assessment).

Other types include Cornish Units, Reema Hollow Panel, Laing Easiform, Boot, Orlit and many others, each with their own structural characteristics and lender policies.

How Lenders Assess Non-Standard Construction

The primary concern for lenders is whether the property can be insured at full reinstatement value, whether it will retain its value over the loan term and whether it will be saleable if they need to repossess and sell it. Unusual construction types create uncertainty on all three of these factors, which is why lenders apply stricter criteria.

For most non-standard construction types, lenders will require a more detailed structural valuation report from a surveyor experienced with that construction type. In some cases, they will require a full structural survey (a Building Survey, formerly known as a Homebuyer's Survey) rather than a standard mortgage valuation. For PRC (Precast Reinforced Concrete) properties such as Airey houses, a PRC certificate issued by an approved inspector and confirming the property has been repaired to a recognised standard can significantly improve lender appetite.

Lenders who accept non-standard construction typically offer lower maximum loan-to-value ratios than for standard properties — commonly 70-75% rather than 80-85% — to account for the possibility that the property might be harder to sell or might achieve a lower price than an equivalent standard-construction property.

PRC Certificates and Repair Programmes

For precast reinforced concrete properties, a PRC certificate is the key document that unlocks mainstream lending. These certificates are issued by PRC Homes Ltd or other approved bodies and confirm that a property has been repaired or upgraded to a recognised standard that addresses the structural concerns associated with the original construction. Without a PRC certificate, many lenders will not consider a concrete system-built property at all.

PRC repair programmes typically involve overlaying or replacing the original concrete structure with a new brick or block outer skin, improving insulation and upgrading services. The cost of a PRC repair is substantial — commonly £15,000 to £30,000 — but significantly increases the property's marketability and value. Some specialist lenders will fund a PRC repair programme through a secured loan, with the certificate being provided on completion of the works.

If you own a PRC property without a certificate and want to raise finance, it may be worth investigating whether the cost of completing a recognised repair programme (funded by other means if necessary) would be worthwhile to open up a wider range of lenders and achieve a better loan rate.

Specialist Lenders for Non-Standard Construction Secured Loans

Second charge lenders are generally more flexible on construction type than first charge mortgage lenders, which is one of the reasons that secured loans can be a useful option for non-standard construction property owners. Specialist second charge lenders such as Together Money, Pepper Money and Precise Mortgages have broader construction type policies and more experienced underwriting teams who can assess unusual properties on their specific merits rather than applying blanket exclusions.

Together Money in particular has a strong track record of accepting a wide range of non-standard construction types, including many that high-street lenders would decline. They take a common-sense underwriting approach that considers the specific characteristics of each property rather than applying rigid criteria.

When working with a broker on a non-standard construction secured loan, it helps to have as much documentation as possible about the property — including any structural surveys, builder's details, PRC certificates and evidence of any works carried out — to present to the lender at the outset. The more information available, the more efficiently the underwriter can reach a decision.