Barn Conversion Mortgage
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What is a non-standard construction mortgage?
A non-standard construction mortgage is required for any building that is not a standard property of brick and mortar construction. As you can imagine, properties that fall into this category are widely varied, from steel and concrete high-rise towers, thatched roofs and timber framed properties to barn conversions, and everything in between.
Barn Conversions in More Detail
If you’re planning on converting a barn, there are many things to consider before construction begins. With regards to the current structure, you should consider whether you will need planning permission from the local authority in order to make changes to it, as well as the potential that it’s a listed building. It’s possible that you won’t need full planning permission for a barn conversion, however, this will be dependent on where the local authority in question draws the line between a conversion and a re-build. If it is determined that your plans constitute a re-build, then full planning permission will be required.
You should also consider whether you have the appropriate access and right of way on the property, as well as what type of surveys may be necessary for a property of this type.
Of course, there are also personal considerations, such as where you will live during the renovation, how you will finance the project and whether your budget will fully cover the required works.
It’s fairly common to go over budget on development projects, so it’s a good idea to have a contingency available. It’s also likely that mortgage lenders will want to see a full budget breakdown or ‘Schedule of works’, so ensure that this is available before making your application.
What other things should I consider when buying a house with non-standard construction?
Whilst the type of maintenance will depend on the construction materials of the specific property in question, the likelihood that niche products that both cost more to buy and require specialist contractors, will be needed.
On top of the additional costs due to rarity, many buildings of non-standard construction require more frequent maintenance due to the vulnerability of the materials used, for example, thatched roofs, which look beautiful, but need to be completely replaced every thirty years.
If there are agricultural restriction on the surrounding land, this could affect the amount of lenders who are willing to offer a mortgage, so it’s important to be aware of any in advance of your application.
Future demand and later sale
The main thing to consider alongside broad appeal of your property, is future mortgageability. With careful, but significant renovations, it is possible to improve the appeal and mortgageability of your property. For example, improving the structural integrity of your home may mean that it will fulfill the requirements of a standard property, therefore making it much more accessible to future buyers.
It can be more difficult to find availability of insurers that are willing to cover non-standard construction properties and premiums can be higher.
Specialist insurers who are experienced in providing policies for this type of property will be most able to offer you a competitive deal.
Unlike a standard residential mortgage, a non-standard construction property will almost always require a full and comprehensive survey. The likelihood that surveys will reveal issues that aren’t immediately visible is much higher than on a standard residential property, so it’s important to be aware of this. The valuers decision has far more overall impact on the acceptance of your mortgage application than it would with standard mortgaged properties.
Are barn conversions mortgageable?
It’s possible to get a mortgage for a barn conversion, however, the majority of mortgages require that a property is immediately inhabitable at the time of purchase.
If you have a large project ahead of you before the conversion is liveable, it’s worth noting that the loan won’t usually be released until it’s safe for you to move in.
Is it more difficult to get a barn conversion mortgage/are they more expensive?
If you purchase any non-standard property, it can be harder to obtain a mortgage on the basis that it’s considered high risk. You should also bear in mind that it narrows down your options for resale, given that mortgages are less attainable than for a standard residential home.
Another thing to consider is that the affordability criteria are more difficult to meet and Mortgage Lenders usually offer lower Loan to Value lending, due to the enhanced risk. You can also expect to pay higher interest rates and therefore repayments on your mortgage, than on a standard residential mortgage.
With that being said, there are specialist lenders who are more able to accommodate this type of mortgage, our team would be happy to help you find the most suited product from this type of lender.
Are there alternative barn conversion mortgage options?
If you need finance in place to fund the conversion, a non-standard construction mortgage will not release the funds in time, given that your property must be liveable for them to do so. In this case, developmental finance, such as a Self Build mortgage could be more suitable.
Self Build Mortgages are specifically designed for this type of purchase and as such, the funds are released in stages, to coincide with the construction project. There are usually five stages of finance, as follows:
- Purchase of the land or building (barn)
- Foundations and structural renovation
- Eaves height completion
- Implementation of a watertight roof
- Internal fixtures and fittings
How can a Mortgage Broker help?
Here at The Mortgage Co, we have helped many mortgage applicants find the appropriate product to finance their barn conversion. We have access to independent Mortgage Lenders that will not be found on the high street and offer specialist mortgages, which are more closely matched with your needs.
It’s always advisable to talk to an authorised and regulated Mortgage Broker before you decide on the right type of mortgage for you, but if you’re planning a project of this scale, it’s even more important to speak to us early on. We can help you to determine the likelihood of finding funding, prior to you taking the next step, which can save you wasted money and effort as well as potential disappointment.