Managing a Property of Non Standard Construction
The easiest way to explain what a property of ‘non standard construction’ is to define it as a property that is not made of brick or stone walls, with a slate or tiled roof. There are lots of examples of ‘non-standard’ construction properties, but they tend to be very specific to an area, depending on the type of materials that were readily available to build.
Examples of ‘Non Standard’ Construction Homes
There are lots of examples of ‘non standard’ construction homes, from ones built purely of timber to concrete and prefabricated homes. There are nearly 1.5 million of the latter types of homes in the UK and were mainly built during and post-war as ‘cheap’ housing. Unfortunately unlike brick or stone, concrete doesn’t last as long and properties were soon suffering from crumbling concrete and the steel that binds the concrete together corroding, causing cracks to appear. As a result, it’s difficult to get both a mortgage and insurance to purchase or live in these types of properties.
The reason mortgage companies don’t like lending on these types of homes is that these properties aren’t deemed as ‘safe to lend’ for various reasons. The main reason is that the demand for ‘non standard’ homes is restricted, so if you default on the mortgage, then it will be more difficult for them to sell and recoup their money. The other reasons include the difficulties in maintaining a timber or concrete home, and therefore they don’t want to lend in case the property hasn’t been properly maintained, which can result in it losing its value very quickly. Again, this means it’s more difficult for the mortgage company to recoup their money should you default on payments for any reason.
Top 10 tips when considering buying a non-standard home
1. Make sure the property is priced at a discount to reflect the difficulties in raising finance and insurance.
2. Most ‘non standard’ properties are sold at auction so don’t make an offer on a property unless you are sure you know what it’s made of.
3. Ensure you budget enough to purchase the property as surveyors’, mortgage and legal fees to purchase the property may be higher than normal.
4. Either have the cash ready to buy the property outright or find a specialist lender that is happy to lend on the property before you make any offers.
5. Have a specialist survey carried out on the property and ideally go around with the surveyor so you are clear about the problems the property does/doesn’t have.
6. Secure a specialist legal company to carry out the conveyancing, usually someone local to the area that has experience of additional questions that need to be asked.
7. Find out what the bills will be, for example will the heating bills cost more or less?
8. Make sure you secure quotes for insuring the property from a specialist company who understands the problems that the property may suffer and should therefore give you cover more suited to your needs. Contact Towergate Insurance for a quote.
9. If the property needs renovating make sure you secure the help of builders with experience of renovating properties like yours, don’t just go for the cheapest quote and ensure you agree the work that needs doing and any guarantees via a contract.
10. Understand that when you come to sell the property, unless you have renovated the property to ‘standard’ construction, it may take longer and you may have to sell at a discount to attract a buyer.
Non-standard construction properties can be turned into ‘standard’ construction properties by either securing planning permission to take down the property and then rebuild it, or by doing remedial work such as taking away the concrete panels and replacing with bricks and mortar.
If you buy the property at a good discount, it may be that you could either rebuild or renovate and you may be able to add enough value that you could sell at a profit in the future.
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