Timber Framed Mortgage

What is a timber framed property? Is it difficult to get a mortgage on a timber frame house?

A timber frame property is ordinarily, a traditional property that has an outside wall and an inside wall. In between, there may be a cavity or it may be solid. With a timber framed property, the outside wall is usually brick or stone, but the inner frame is made of timber.

It was a cheaper way of building and much quicker than building an inner leaf of brick or block. Timber was a much cheaper product, so that’s why it was used back in the late 50s, 60s, early 70s.
There are also newer properties that are timber framed. In Germany, they build a lot of timber framed properties, and it’s still quite a common way of building.

Is it difficult to get a mortgage on a timber frame property?

It isn’t necessarily difficult, it’s just that anything other than brick or stone is classed as non-standard construction.
With non-standard construction, criteria differ from lender to lender. HSBC, for example, will only go up to 80% Loan to Value on a property that’s non-standard. If you’re buying a timber framed house and you’ve only got a 5% or 10% deposit, HSBC would therefore not be the lender to approach.
On a more positive note, an awful lot of lenders will lend up to 90% or 95% on these. It’s just a case of choosing the correct lender in the first place. Plenty of lenders will consider lending for a timber-framed house.

Often you can’t tell it’s a timber-framed house. I actually own a timber-framed property that I rent out. I’ve had it for 20-odd years, and it’s an ex-council property, in a row of four terraced houses that are all timber framed. The rest of the street is actually brick built, with a brick outer leaf and brick inner leaf, and just these four are timber framed.

When you look at the whole street, these four houses don’t look any different but that can sometimes cause problems. You might approach HSBC for a 90% mortgage because you don’t think it’s timber-framed, and then once it is identified as timber framed, they will tell you that they won’t lend on that property because of it’s non-standard construction.

What are the different types of timber framed houses?

It’s down to the builders that built them, but they all come under the guise of non-standard construction. That includes timber framed, steel framed and concrete sectional homes – they all come under the same banner. A lot of different builders construct properties this way.

Why are some lenders reluctant to offer mortgages for these properties? What lending criteria do I need to meet?

Some lenders are reluctant to offer higher Loan to Values because of the build. A home with a brick or block built outer leaf is a very permanent structure, while timber is of course prone to rot, damp and other things that may concern a lender in years to come.

You can’t see any rot or any issues behind plastered walls. Some lenders look at them as a temporary property rather than a permanent one. They were put up more cheaply than brick built homes. When they were built back in the 50s, 60s and 70s, it was believed it was for a short-term basis, but here we are, 60 or 70 years later and they’re still up; many without any problems at all.

How much deposit will I need for a mortgage on a timber framed house? How much can I borrow?

It’s identical to a normal mortgage. It’s just a case of your mortgage broker putting it with the right lender. If you went to HSBC, you would have to find a 20% deposit. If you don’t have a 20% deposit, we would look at a different lender. Many will go up to 95%.

Just as if you were buying a brick or stone built property, the deposit you’ve got is what you’ve got. If you haven’t got 15% or 20% or 30%, we’d go with a lender that would consider 5% or a 10%.
The majority of these properties tend to sell to First Time Buyers because they are a bit cheaper and it’s very common for First Time Buyers to just have a 5% or 10% deposit.

How much you can borrow is totally based on your income and expenditure, as it is on any property.