Concrete Construction Mortgage

Can you get a mortgage on a concrete house?

Yes, you can. I’ve done hundreds, maybe thousands of mortgages on concrete sectional properties over the years. As long as you know who built the properties, it really isn’t too bad – we can look to place it with a lender that will accept it.

Lenders have a lot of different criteria around this. One I can think of straight away is that HSBC, they only go to 80% Loan to Value on a non-standard construction. A concrete property is not built of brick or stone, so it’s called non-standard construction.

Generally, the main clients on these homes are First Time Buyers, and if they have a 5% or a 10% deposit they wouldn’t get very far with HSBC in this situation. That client might believe it’s difficult to get a mortgage on a concrete house.

Many lenders will go up to 90% or 95% Loan to Value on a concrete property. So, while it can be a little bit more difficult, it’s mainly just a case of approaching the right lender for the right property.

Is it harder to get a mortgage on a property made with concrete?

I had a client in Scotland, where there’s quite a lot of non-standard construction. He had applied to three separate lenders. The first lender declined it altogether, because they don’t do non-standard construction. He’d approached the wrong lender. The second lender wanted a structural engineer’s report, which was about £700. That lender always wants a structural report, and I could have told him that. The third lender was HSBC, but he wanted a 90% mortgage so they couldn’t help.

He contacted me saying he’d had all sorts of problems getting a mortgage on the property. He felt that the property was the problem, but it was in the right area for them and they were desperate to buy it. I had a mortgage offer for them in less than a week, because I chose the right lender.

If you select the right lender from the outset, it really shouldn’t be an issue. The client knew who built the property so I could do all my due diligence beforehand. We put the application in and it flew through.

Can you get a mortgage on a concrete ex-council house?

The majority of these properties are ex-council. Concrete section homes were very popular in the 50s and 60s as a cheap way of putting up properties very quickly.

They were created as a fairly temporary accommodation that wouldn’t last. But here we are recording in August 2024, many of these properties are still up with no problems.

There are lots of different types of properties such as Wates, Wimpey No-Fines, Laing Easiform, Levitt Cartwright…. There are also different types of concrete, prefabricated and reinforced concrete properties. They all come under the banner of non-standard construction.

Other properties that come under the banner of non-standard construction include steel framed and timber framed homes. First Time Buyers tend to be attracted to non-standard construction because these properties are cheaper.

You tend to find that you get plenty of accommodation, at a lower price. As long as you know what type of property you’re buying, and you realise it’s non-standard construction from the outset, then they are perfectly adequate, and mortgageable. I’ve done probably three or four this year, all Right to Buy deals through the council, where it’s the tenants buying concrete sectional properties from the council. Again, they have been mortgageable and none of these have experienced any problems.

Are there structural problems with a concrete construction home?

Some properties in the past have had some issues. It tends to be that the concrete is porous and certain properties, such as Airey homes, have steel bars running through them to strengthen the concrete. In some cases, these were not galvanised or stainless steel, so over time, the water penetrated and the reinforced bars could rust.

This was addressed by removing the outer skin of the concrete and rebuilding it with brick. So now, it’s a brick built property. They’re often semi-detached and you would have the left and the right side done at the same time. They would be covered with a PRC (precast reinforced concrete) warranty or guarantee that the works have been done to a certain standard. With that in place, they can be mortgaged as normal.

What about refurbished concrete properties?

What we’re talking about here is not putting in new windows or new heating. It’s those Airey properties again. I predominantly work in West Yorkshire and we have lots of these. They were previously on the defective housing list, so the council would pay for the rebricking process. You used to get about an 80% or 90% grant on these works.

Once you’d paid your 10% or 20% they would issue a PRC which meant the property was mortgageable. The property came off the defective housing list and you could get a mortgage.
There are still properties that are not mortgageable, but they have become fewer and fewer over the years.