Whether you are planning a self-build or purchasing an existing timber framed property, are timber framed houses mortgageable? Like concrete houses and steel frame houses, timber framed houses are often considered by lenders to be of ‘non-standard construction’. In the past, securing a mortgage for any house deemed to be of non-standard construction could be extremely difficult. With the increasing prevalence of oak framed homes in the UK, many lenders have relaxed these restrictions. However, there can still be difficulties securing finance for timber framed houses, depending on the lender. Due to ease of construction, sustainability and insulation potential, the popularity of timber frames is still on the rise and lenders will soon have to address this.
Why Are Timber Framed Homes Seen as Higher Risk?
Any mortgage on a property is effectively a loan with the building itself acting as security. If the borrower defaults on payments, the home can be repossessed and resold to clear the remaining balance of the loan. If lenders foresee the resale of a building being a problem, they are unlikely to offer a mortgage in the first place. For example, in the 1950s huge amounts of prefabricated concrete homes were built in the UK as social housing in the post war years. These were seen as strong, sturdy buildings designed to last and lenders were happy to offer mortgages for them. In the 1980s, surveys revealed widespread problems with crumbling concrete and corroding steel binding rods weakening the structure. This made them impossible to insure and difficult to sell on and consequently mortgage lenders refused to accept them as security.
In the past timber framed houses have been difficult to insure as they were seen as susceptible to damp and a greater fire risk than standard brick buildings. The lightweight construction of timber framed buildings also meant they did not require the heavy foundations common to brick and block houses. Along with the lighter, less dense nature of much timber this led to preconceptions of timber framed houses being less structurally sound. While modern building methods have improved on many of these failings, oak frames never really had these issues in the first place. Due to the weight of oak frames they require substantial foundations and mounting supports on these avoids contact with ground water. Coupled with the speed of building and quick weatherproofing during construction, water is not given much chance to penetrate the frame. Oak is naturally highly water resistant and burns at a slow, consistent rate, performing even better than steel during fires. Combined with an outer skin of brick, oak framed buildings are the peer of brick and block builds in most regards.
Factors Affecting Mortgages on Timber Framed Houses
Several factors will affect whether you will be eligible for a mortgage on a timber framed house. If you can get a mortgage, these can still affect the financial terms the lender will offer, and it can be useful to shop around.
1. Type and Age of The Property
There are many types of timber used in the manufacture of timber frames, some less reliable than others. Unfortunately, in the past this has tarred all timber frames with the same brush, but the comparative strengths and weaknesses are being recognised. As noted above oak is stronger and more resistant to damage than many other woods, and this could positively affect your chance of securing a mortgage. The more recent the build, the more stringent the building methods and regulations used. Modern timber frames are usually viewed more positively as a result and few lenders will even consider a mortgage for a frame built before 1970. A building survey from a RICS (Royal Institute of Chartered Surveyors) surveyor will give a comprehensive report on the condition of the frame to assure lenders of its suitability for a mortgage.
2. Other Materials Used in Construction
Lenders are generally reluctant to offer mortgages on timber framed properties with cladding secured directly to the frame. This is seen as less secure, less weatherproof, and more of a fire risk. If cladding is not maintained properly this can lead to damage and depreciation in value, although again oak is less susceptible. Decorative timber cladding over a brick or blockwork is preferable, although some lenders will only accept cladding on the upper story.
3. Choice of Lender
Each lender has different criteria they apply when deciding whether to offer a mortgage for a timber framed house. The services of a mortgage broker can be invaluable when selecting a lender. Their knowledge and experience make selecting the best lender with the best rates on non-standard properties far simpler. On occasion, they may even be able to access broker-only deals or specialist lenders unavailable to the general public.
4. Credit History, Deposit and Additional Security
Any prior missed payments, defaults or repossessions can negatively affect your chance of securing a mortgage. This may not entirely exclude you, but a Bad Credit Mortgage may be necessary. As non-standard properties are considered a higher risk by many lenders, a larger deposit may be demanded. Similarly, being able to offer additional security against a loan (for example, another property) can sway lenders in your favour.
As non-standard properties are usually in lower demand than ordinary properties, this can also affect your chances of organising a mortgage. Mortgage providers will always want to be sure that in the event of foreclosure, they can guarantee a sale to make their money back. Again, a mortgage broker can save a lot of time and effort here. If they can prove that the local housing market has many non-standard properties that sell consistently well, lenders may be reassured. If not, they may be able to recommend local lenders familiar with local demand who are more amenable.
A Note on Self-Build Mortgages
For self-build project, timber frames are massively popular due to their ease and speed of construction. It is possible to get a self-build mortgage for a timber framed house, with additional guarantees. You may need to prove that you have the means and ability to erect the structure properly, or at least oversee the project capably. Self-build mortgages are usually released in staged drawdowns and lenders will require periodic onsite inspections. This guarantees that the work is progressing as planned and to the correct standards before additional funds are released. If your frame must be paid for up front this can prove a problem. Check with the manufacturer for payment plans to stage payments to coincide with your mortgage instalments.
Hardwoods Group offer a range of standard design oak frames to suit many styles of building. We also offer a bespoke design service for customers with their own unique vision and will strive to make it a reality. Contact us to discuss your requirements, we will be happy to help.
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