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Barn Conversion Mortgage - what you need to know
Living in a barn conversion is a dream for many – but lenders see barns as ‘non-standard construction,’ which can complicate the mortgage process a little. Whether you’re converting a barn yourself or are hoping to buy an existing conversion, it pays to seek mortgage advice.
What is a non-standard construction mortgage?
A non-standard construction home is built from materials that don’t conform to the usual standard for a property. A ‘standard’ property has brick or stone walls with a roof made of slate or tile. Anything else is non-standard construction.
Mortgage Lenders set these types of criteria to protect against unnecessary risk. It is perfectly possible to get a mortgage on a non-standard construction home, but you may find that the high street companies can’t help. You will often need to seek out a specialist lender.
How much does it cost to convert a barn?
Barn conversions are popular because they provide airy, spacious living with high ceilings, lots of natural light, galleried landings and period features.
The average cost of a barn conversion in the UK is around £275,000, but this will vary according to the size of the building, the location within the British Isles and the specifications of the design.
Are barn conversions mortgageable?
If you are managing the barn conversion work yourself, a common way to fund the build is with development finance, which is a form of short term borrowing.
If you plan to live in the home once it is built, a self-build mortgage is another option. There are pros and cons to each approach, so talk to a Mortgage Advisor about which finance option is the most suitable.
If you’re buying an existing barn conversion you will usually need a non-standard construction mortgage.
The FCA does not regulate development finance and we act as introducers for it.
Are barn conversion mortgages more expensive than a standard mortgage?
The reason why some lenders won’t cover non-standard construction properties is that they believe they are a higher risk. You will often need to find a more specialist lender to get a mortgage deal.
Not only does that mean that there are fewer deals to compare but you can also find that interest rates are higher, Loan to Value limits are lower and affordability requirements are stricter.
That said, many people consider this to be a small price to pay for the benefits of living in a beautiful barn conversion. And of course, many go on to own a converted barn and live there happily for many years.
What other things should I consider when buying a house with non-standard construction?
Before you press on and apply for a non-standard construction mortgage, it’s good to be aware of all the main considerations regarding this type of property. That way, you will make an informed decision before you buy.
- Maintenance – talk to your vendor about any special maintenance that the property will require. Some barn conversions come complete with a thatched roof, for example. While these can look stunning, they need more maintenance than a standard roof.
- Future sale – bear in mind that it might not be so easy for a future buyer to get a non-standard construction mortgage. The property market can change a lot and so can lending criteria, so it could prove more difficult to sell your home when the time comes.
- Insurance – getting buildings insurance can prove more expensive when your home is of non-standard construction. It may be worth getting a quote before you buy the property to get an idea of what your annual premium might be.
- Valuation impacts – Your lender will want to assess the property and will use a standard valuation process to do this. With some properties the surveyor might decide that you need specialist reports – to check for damp or the condition of the timber. This can add to the survey costs of a barn conversion mortgage.
- Planning permission – if you have further improvement ideas, explore how likely planning permission will be and if there have been any previous challenges.
How can a Mortgage Broker help?
Talking to a Mortgage Broker like Bespoke can be invaluable when there is anything unusual about your situation or the property you’re buying.
We have helped many clients get a suitable mortgage deal on a property of non-standard construction. We know the lenders that are happy to lend on unusual properties and how to get the most competitive rates.
Once we’ve confirmed what the repayments on your mortgage are likely to be and that these will be easily affordable, we’ll advise you throughout the home purchase process and help with the mortgage application. Remember that your home may be repossessed if you do not keep up with the repayments.
Bespoke Mortgage & Finance Centre Ltd is an appointed representative of Sesame Ltd which is authorised and regulated by the Financial Conduct Authority.
YOUR PROPERTY MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGEFFFFni
YOUR PROPERTY MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE
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