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Author: Elliott Culley - Director & Mortgage Adviser of Switch Mortgage Finance
Steel Framed Mortgage
Obtaining a steel framed mortgage can present its own unique challenges compared to a traditional mortgage. Many mortgage lenders consider them to be non-standard construction.
If you are interested in purchasing a steel framed house, you may have found out some lenders do not offer mortgages on this type of property. You might be thinking is it even possible for me to get a mortgage on a steel framed property and the answer is yes, you just need to know which lenders to approach.
What are the most common types of steel framed construction residential properties in the UK?
The most common type of steel framed property is BISF. A BISF (British Iron and Steel Federation) construction house is a type of residential property built using a non-standard construction method that was popular in the United Kingdom during the mid-20th century, particularly in the post-World War II era.
BISF houses were designed to be cost-effective and quick to build, which was important in the post-war housing shortage.
An Airey property, also known as an Airey house or Airey prefabricated house, is a type of residential dwelling found in the United Kingdom. These houses were constructed during the mid-20th century.
Like BISF houses, Airey houses also had steel frames, which provided structural support. The exterior of these houses was usually clad with concrete panels.
Can you get a mortgage on a steel framed house?
Yes, it is certainly possible to get a steel framed mortgage on a property in the UK. Some lenders won’t approve mortgage applications for this type of property, so you need to make sure you approach the right mortgage lender.
Depending on when the property was built lenders may have different requirements. It is likely that you will need to get a specialist survey report completed on the property for the lender. You may find some lenders will restrict the loan to value and ask for a higher deposit as a result.
Why is it hard to get a mortgage on a steel framed house?
Mortgage providers may be more cautious when lending on properties built using steel. BISF houses have faced concerns regarding their structural integrity over the years. The steel framed can be susceptible to rust and corrosion, potentially compromising the house’s stability.
Lenders may require a specialized structural survey to confirm the current condition of the property. Lenders will be specifically looking at matters such as construction, present condition and future maintenance needs, potential repairs, saleability and demand.
How much deposit will I need for a steel framed house mortgage?
Although it is possible to purchase a steel framed house with as little as 10% deposit, I would recommend having more deposit available if possible as this will give you access to more lenders.
In some instances, to manage their risk, lenders may restrict the loan to value they are willing to lend and so a larger deposit may be required than would be the case with a traditionally constructed home.
What can affect a mortgage lender’s decision on a steel framed house property?
When applying for a steel framed house mortgage on a property in the UK, mortgage lenders main concern will be about the condition of the property. BISF houses can suffer from a number of specific problems which tend to be caused by poor maintenance rather than defective production or design.
It is worth ensuring that the lower part of a BISF house is well maintained and any cracked or damaged render should be repaired quickly to avoid water penetration. If you see any signs of this it may mean there could be corrosion and this could then be a no for mortgage lenders.
You will also need to fit the lenders criteria, generally speaking there are lenders offering this type of mortgage for all types of clients, whether you are a first-time buyer, self-employed or have had some bad credit in the past, there are lenders available to you.
Speak to an Expert!
Contact us today for expert advice and guidance on your unique mortgage and property needs. We will work with you on a one-on-one to basis to help you find the right solution for your needs.
With our experience you can rest assured that you are in good hands when it comes to securing the financing you need for your property.
What costs may I have to pay to get a mortgage on a steel framed house property?
Buying a non-standard construction property will be more expensive than a standard construction property. The main cost will be the survey required by the lender.
It is likely the lender will ask for a specialist survey carried out by a qualified engineer or surveyor with expertise in steel framed construction properties to be carried out. When viewing a property like this I would ask if a recent survey has been carried out.
You may find home insurance is more expensive than a traditional property and costs of maintaining the property may also be higher. It’s important to be aware of the potential for higher maintenance costs long term.
Whilst steel framed homes were designed to last for many centuries, they can be susceptible to corrosion if not properly maintained. As such, it’s important to factor in the cost of regular maintenance and repairs when budgeting for your new home.
Can I get a buy to let mortgage on a Steel framed house property?
Yes it is certainly possible to obtain a buy to let mortgage. Some mortgage lenders do have a minimum income of £25,000 per year that you will need to earn, but some require no minimum income at all. You will also be restricted to a 75% mortgage and therefore will need a 25% deposit.
If this is your first time being a landlord or you are first time buyer, then there are some lenders that will not consider you, and you will want to make sure you apply to the correct lender by using a mortgage broker.
Can I get a steel framed house mortgage with bad credit?
Although, it is possible to get a steel framed house mortgage with bad credit, you will need a larger deposit and there will be less lenders available to you so getting a mortgage can be much harder. If you are not sure on your credit situation and whether it could affect your mortgage chances, then we would advise to get in contact with us.