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UK Equity Release On Non Standard Property Types

Equity Release On Non Standard Property

Thinking about equity release but unsure if your property qualifies – Equity Release On Non Standard Property?

  • Get a decision in principle with a free desktop-based survey
  • Loan to value up to 60%
  • It can be used to pay off your existing mortgage.
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  • 5.11% fixed for life
  • No early repayment fees

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We know everyone’s circumstances are different, so we work with mortgage brokers who are experts in all different mortgage subjects including Equity Release On Non Standard Property.

Why lenders won’t allow for equity release on certain properties

For lenders, it’s all about the resale further down the line and making their money back. Any factors that put the ability to re-sell into question will raise a red flag for them unless they’re an easy fix. Issues can include safety problems such as a property based in a flood zone, one that’s located near high-voltage power lines or a home that contains asbestos.
Other undesirable features include a property with commercial neighbours, one with single-skin walls or a house in an unattractive area. Some of these issues could be remedied and a broker would be able to suggest how best to address them ahead of the application process.

Properties that don’t qualify

These are the property types; in which lenders take a harder stance.

Park homes: As a mobile home situated on a protected site, the property is considered non-standard as well as being land that the property owner doesn’t own or have a leasehold for. This means the lender has nothing to secure the loan against and makes equity release on a park home not possible.

Shared Ownership properties: Lenders require a borrower to have 100% ownership of a property in order to consider equity release. In this situation, owning only a portion of your property with either a developer or local council as a co-owner means you wouldn’t be able to take equity release on a Shared Ownership property.

Commercial properties: If you use property, even just on a part-time basis, for any commercial endeavours, you’d be unable to do an equity release – farms.

This includes instances where a property is rented out on Airbnb, leased to long-term tenants or run as a hotel.

Holiday homes: One of the stipulations for equity release is that the home you’re taking the money from is your main residence. A holiday home or even a second home wouldn’t qualify under this criteria, though you can use the funds to help you purchase a second property.Studio and basement apartments: In general, lenders tend to be averse to studio and basement flats, and unfortunately, that transfers through to their equity release products.

Properties with caveats

Some properties fall in between these two categories, meaning that for some lenders, equity release involving one is a hard no, but for others, potentially more specialist lenders, it remains an option. If you have one of these properties, it’s best to consult an equity release advisor for advice on where to make your equity release application.

Properties of non-standard construction

If made from anything other than bricks and mortar – perhaps it has a timber or steel frame, a thatched or tin roof or is made of concrete – then a property is considered non-standard. This equates to a higher risk level for lenders, making equity release on non-standard properties harder to come by.
Listed buildings: Protected by Historic England

there are certain rules and stipulations on listed buildings in order to preserve them. This could affect a future sale and makes a lender for this type of property harder to find. There are however specialist lenders offering specific equity release products for properties considered as Grade I, Grade II, or Grade II*.

Ex-council property

Lenders are generally willing to offer equity release in this scenario as long as what’s classed as the discount period set by the local council has passed. How many other properties in the area are still owned by the local authority will also be part of the lender’s consideration.

Leasehold property

Typically, getting equity release on a leasehold flat or house isn’t an issue if there’s significant time left on the lease. A minimum 75 years is the usual stipulation, but some lenders may require it to be as long as 80 or even 90 years. If the freeholder is the council, be aware that a lender could also ask that you buy the freehold to get equity release.

Retirement property

This isn’t usually much more difficult than equity release on a standard house, though fewer lenders will consider it.

Historically, properties with an annexe, those with flat roofs and those containing a specific form of spray foam insulation have also been harder to get equity release on.

In this situation, a broker could quickly consult and advise on whether the property in question would qualify for an equity release arrangement.

If it falls into a grey area, they can advise on how to mitigate against any risk lenders may see and recommend a lender with a track record of offering equity release on such properties.

They’d also be able to:

Guide you through the application process for equity release.
Offer a calculation on what they believe you could feasibly ask to borrow.
Connect you with specialist lenders who can’t be accessed by the general public and may be more willing to offer lower interest rates.

Other factors lenders consider

Lenders won’t only look at the property type when assessing your eligibility for equity release. They’ll also want to know:
That you own the property in question – If you co-own it with a friend, family member, local council or developer, equity release wouldn’t usually be an option you could pursue.
That you live in the UK for over six months of the year
Many retirees may choose to travel and spend time abroad. Even if you’re a UK citizen, to qualify for equity release, lenders will want proof you spend a significant amount of time in the country to qualify.

The current value of the property

A full valuation will be conducted by a surveyor sent by the lender to determine its worth. If a property comes in lower than £70,000 you may struggle to find a lender willing to offer an equity release mortgage and if over £1 million, a lender may ask for additional underwriting checks.

The state of the property

A lender will also want to see that the property is in what they class as “sellable condition.” This is because they’ll need to sell it at the end of the term, and if it isn’t of a certain standard, that will make it harder to do so.

As with any mortgage application, lenders will also be factoring in a borrower’s age, income if still working, the amount looking to be released, and any future.

Differing from the traditional mortgage application process,

Obtaining an equity release mortgage can be complex, so it’s worth having an expert in your corner. As a specialist in the equity release market, they’ll be able to assess whether your property is eligible for such a loan, recommend which lender is likely to give you the best deal and help navigate the application process with you.

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FAQs

Can you get equity release on a prefab house?

A prefabricated house is one that’s usually made elsewhere and then assembled on-site at a later date. Such a property is considered non-standard by a lender. This means it will be harder to find a lender willing to offer equity release on such a house, but it isn’t out of the question =PRC.

Can you get an equity release on a Grade 2 listed building?

Yes. There will be fewer lenders willing to do so on this type of property given it may be harder to sell in the future, but it is possible. A broker would be able to recommend a specialist lender for listed buildings.

If you’re over 55 and own your own property, equity release can help you unlock cash from your home that can be used for many purposes.

Paying off equity release early – Equity Release On Non-Standard Property

If you have an equity release plan but don’t want to be stuck with a potentially hefty debt for the rest of your life, there’s a solution.

Interest-Only Lifetime Mortgage Over 60 and RIO Mortgages Over 70: An Exploration of Non-Standard Construction in the UK

When considering an interest-only lifetime mortgage after 60 or a RIO (Retirement Interest-Only) mortgage post-70, it’s essential to understand the implications associated with non-standard construction homes. In the UK, your property type can dramatically influence your mortgage options. This comprehensive guide delves into the complexities of non-standard constructions and how they impact mortgages for older homeowners.

Understanding Non-Standard Construction

What is a non-standard construction, and what does non-standard construction mean? At its core, non-standard construction refers to homes built using unconventional materials or methods. This contrasts with standard construction, which usually employs brick and tile. Non-standard houses can be made from concrete, steel frames, timber, or other materials not traditionally used in mainstream home building.

Types of Non-Standard Constructions and Their Implications

  1. Concrete House: One common type is the concrete house. Despite their robustness, obtaining a concrete house mortgage can be challenging. The phrase how to make a concrete house mortgageable reveals a common concern among concrete homeowners.
  2. Steel Frame Houses: Houses with steel frames are another type. Questions arise such as, Can you get a mortgage on a steel-framed house? or Do Halifax lend on steel-framed houses? and mortgages for steel-framed houses. Steel-framed homes, though durable, may face scrutiny from certain lenders due to perceived long-term issues or expensive maintenance.
  3. K-lath Construction: This term, sometimes referred to as k lath construction, represents another non-standard building method, though it’s less common than concrete or steel frames.
  4. Timber Frame Houses: These homes can be particularly tricky. Terms like Barclays timber frame mortgage and mortgages on timber frame houses reveal that even high-street banks have particular conditions or reservations when it comes to timber structures.
  5. Clay Lump Construction: As one of the rarer methods, this type uses compacted clay to form walls. Its rarity means many lenders lack familiarity, leading to more cautious lending decisions.

Recognizing Non-Standard Constructions

A vital aspect is identifying if a home is of non-standard build. How to tell if a house is non standard construction? often begins with surveyors who can accurately identify the type. Sometimes, even if you’re aware, like with concrete ex council houses, mortgageability remains a concern.

The Mortgage Landscape for Non-Standard Construction

  1. High-Street Banks: Different banks have varying policies. While some, like Halifax, may be hesitant, shown in terms like non-standard construction mortgage Halifax, others, such as Santander, offer niche products, evident in phrases like Santander non-standard construction mortgage or Santander HMO mortgage.
  2. Specialist Lenders: Many homeowners in the UK turn to non-standard mortgage lenders specialising in atypical properties. They often understand the nuances better than mainstream banks.
  3. Building a Non-Standard House: If you’re looking at constructing a unique property, terms like home building mortgage, home builders mortgage, building mortgage, and building mortgages become relevant. Many wonder, Can you get a mortgage to build a house, or can you get a mortgage to build a house in the UK? It’s possible, but typically through specialized lenders or self-build mortgage arrangements, such as those offered by self-build mortgage brokers.

Insurances and Protections

Non-standard homes can sometimes pose a challenge when securing insurance. Homeowners should be aware of phrases like non-standard construction house insurance and home insurance for non-standard construction. However, many specialist insurance providers cater specifically to non-standard builds.

Potential Challenges

  1. Valuation Issues: Instances where NatWest mortgage declined after valuation are not uncommon. Sometimes, a low valuation can lead to challenges in securing a mortgage, especially with non-standard properties.
  2. Repairs and Maintenance: A non standard construction repair cost can be hefty. If you’re considering converting a non-standard construction house, the cost of converting a non-standard construction house must be factored into your financial planning.

Advantages and Disadvantages of Non-Standard Constructions

There are several benefits to non-standard homes. They are often unique, with distinct architectural flair. Their materials can provide superior insulation or have a reduced environmental impact.

However, the disadvantages come from the financial side. As phrases like mortgageability meaning suggest, the potential difficulty of obtaining a mortgage or resale concerns are genuine.

The Equity Release Perspective

Older homeowners may want to tap into their property’s value. However, if you have a non-standard home and are considering an interest-only lifetime mortgage or RIO mortgage, you need to be aware of specific challenges:

  1. Equity Release Providers: Some equity release lenders, including non standard construction equity release lenders, are wary of non-standard homes. The durability or long-term value of such properties can impact decisions.
  2. Mortgage Options Over 60 and 70: Those considering an interest-only lifetime mortgage over 60 or RIO mortgages over 70 must be particularly vigilant about the kind of home they own. A non-standard construction might lead to fewer offers or less favourable terms.

The UK’s housing landscape is diverse, with various construction methods offering unique aesthetic and functional benefits. However, this diversity comes with complexities, especially when considering mortgages. Understanding the intricacies of non-standard constructions is crucial for older homeowners looking to release equity or secure a mortgage. Whether it’s a concrete house, steel frame, timber structure, or any other unique build, knowing its

impact on mortgage options will help make informed financial decisions. Always consult with mortgage brokers or specialists with non-standard construction experience to navigate the intricacies effectively.