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Building society refuses mortgage on timber-frame home

July 3, 2014

Virginia Wallis,

Q My wife and I recently viewed a new (two-year-old) timber-framed house. My building society tells me it will not consider lending on such a property because of its unconventional structure. Why is this – and do I need to worry about future resale value? TB

A The resale value won't necessarily be affected but the non-standard construction of the property may make this house harder to sell because, as you have found, it is harder to get a mortgage for. All mortgage lenders take the construction of a property into account when deciding whether to lend on it and if a property isn't of the standard brick-and-tile construction, a lot of lenders won't accept it as security for a mortgage on it because it will be seen as harder to sell quickly in case of repossession.

However, not all lenders will refuse a mortgage on non-traditional properties. The building society you talked to may not be prepared to lend on a timber-framed property but others will, although there may be conditions. At Coventry building society, for example, properties made entirely of timber are not acceptable although the lender will consider modern timber-framed properties provided they have an outer skin of brick work. Halifax, meanwhile, relies on the discretion of the valuer and the individual merits of a timber-framed building but won't lend if the cavity between the timber frame and cladding has been "retrospectively filled with an insulation material".

Lenders also vary in their attitude to steel-framed houses, those built of concrete, thatched houses and listed properties. The type of building, location of a property and even its size can also have an impact on a decision to lend.

All types of property fewer than 10 years old are unacceptable to many lenders if they don't have a National House Building Council certificate (or equivalent), for example. Several lenders won't lend on flats above workshops or near restaurants, takeaways, pubs, sex shops, massage parlours or premises that stock explosive or toxic materials such as fireworks and dangerous chemicals. Quite a few exclude flats in blocks of more than four storeys.

And lenders' opinions are divided on the merits of studio flats: some are happy to lend while others won't, as another reader discovered, if the studio flat is smaller than 30 square metres and doesn't have a separate kitchen and a separate bathroom. So if you are considering buying somewhere which is unconventional in some way, it makes sense to find out a lender's policy before paying for a valuation to be done. A mortgage broker may also be able to help you find a lender who is willing to take on an unusual home.

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Source: Guardian Web

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