Although they’re relatively uncommon, there are still a lot of steel framed homes in the UK. Steel frame houses were built from the 1920s onwards, but they became more common in the 1940s. They were viewed as a fast and cheap solution to housing issues following the war. However, due to structural concerns, steel-framed houses were no longer widely built after the 1970s. Steel framed buildings are very similar to other properties, but they have a steel frame instead of a wooden frame, or brickwork, inside. This is a house type that typically has a shorter expected lifespan than standard construction properties, which can make them a risk to buy.

It can be hard to spot steel framed houses at first glance, so while some people deliberately look at buying these homes, it's possible to consider a property without realising it at first. However, if you're looking at buying a steel framed house, you might quickly find that getting a mortgage is more difficult than for a standard property.

Can You Get a Mortgage on a Steel Framed House?

It’s possible to get a mortgage on a steel framed house, but it’s hard without the help of a specialist broker. This is because houses with steel frames are classified as non-standard construction, so you’ll need a specialist mortgage. Not every mortgage lender or bank offers this type of mortgage, and you'll also find that there are often additional criteria when looking for a steel framed property mortgage. Specialist brokers, like John Charcol, will understand the lender's concerns and know what action is required to secure your mortgage application.

What Is a Non-Standard Construction Mortgage?

While most buildings can have a standard mortgage, there are additional concerns over the longevity of non-standard construction properties. This can include structural concerns, weakness of the property caused by weather or natural disasters, or health concerns for the occupants in instances where unsafe building materials are present. Of course, these issues are often not realised before there are many of these properties already built, meaning that there are still enough of these houses in the market to warrant this special type of mortgage.

Why Don't All Mortgage Lenders Offer Mortgages on Steel Framed Houses?

For most mortgages, the house counts as security against the loan. If you cannot afford the mortgage, the property will be repossessed by the lender, who will sell it to cover the cost of their losses. The reason why steel framed houses can be harder to mortgage is that they pose a risk to the lender. Risks include potential structural issues that will reduce the property's value, and because it’s typically harder to resell a steel framed house. Due to these issues, mortgage lenders have less security against the mortgage.

How many mortgage offers you get will depend on what type of house you’re looking at. Some lenders accept applications for more reliable and structurally sound houses. Other mortgage lenders will not offer this type of mortgage at all.

Can You Get a Mortgage on British Iron and Steel (BISF) Houses?

BISF homes are known to be particularly susceptible to structural issues and will have a short lifespan. This makes them one of the hardest steel construction houses to get a mortgage on. These homes can be reinforced in order to make them more stable, but these modifications can be very expensive. This makes the houses less appealing to buyers who are looking for a cheap home. If the home is already reinforced prior to purchase and passes a survey, securing a mortgage should be possible.

Advantages to Steel Framed Houses

Despite the problems that can arise with this type of property, there are some reasons why steel framed homes remain a popular choice amongst buyers.

  • Price - with the issues listed above, there are not many buyers for steel framed houses. This means that prices are generally lower than for a comparative house in the same area. You should always consider the maintenance costs, possible reinforcement costs, and the lifespan of the building when looking at the price. The low initial price might be appealing, but these additional costs could be problematic
  • Weather resistance - there are some weather conditions that steel framed houses cope better with, compared to regular properties and other non-standard construction homes. For example, while steel will rust, it often does not suffer as badly as timber-framed houses during floods
  • Fungal resistance - steel is typically resistant to fungus. Of course, this only applies to the frame of the house. The other areas such as the brickwork, plastering and floors can still be affected by mould and fungus

What Are the Risks with Steel Framed Properties?

Since the risk factors make it so hard to get a mortgage for this type of property, it’s important to know the potential problems that could crop up:

  • Structural issues - most steel framed houses have structural issues due to rust, heat, or buckling over time. This can lead to severe issues, as too much structural damage can make a home uninhabitable and make its value depreciate severely. It can also be hard to spot issues such as subsidence or rising dampness in these properties
  • Maintenance or reinforcement costs - the above problems can be very costly to repair. There is the option to reinforce steel framed houses with brickwork in order to make them more stable and to significantly reduce the risk of future issues, but this is an expensive option
  • Difficulty getting insurance - due to the other issues, it can be hard to get home insurance on a steel frame house, and you might end up paying significantly more than for other properties. It's important to remember that insurance is usually a requirement of most mortgages

How Can I Get a Mortgage on a Steel Framed House?

Getting a steel framed property mortgage can be more complex than getting a standard mortgage. It's always best to get in touch with one of our mortgage advisers, to ensure that you get the best possible offers from specialist lenders.

Are All Steel Framed Houses the Same?

There is a wide variety of houses with steel frame construction. When applying for a mortgage, you will need to get all the information you can about the construction type, manufacturer, and age of the home. You should also find out about any repairs, reinforcements or any other modifications it’s had.

There are some steel framed properties made by well-known developers that are considered more reliable. These properties are seen as less of a risk, but they’re still ultimately seen as a risk. That’s why it’s highly recommended that you use a mortgage broker. It’s even harder to get a mortgage for a steel framed property made by a less well-known developer, or one built by a developer known for sub-par construction.

What Are the Mortgage Criteria for a Steel Framed Home?

The exact criteria will change between different mortgage lenders. It’s important to thoroughly check the criteria when trying to find a mortgage. Most mortgage lenders will require a full list of information about the property, as well as details from a property check.

You’ll also need the basic information that you’d need when applying for any mortgage, such as proof of identification, proof of current address and income information for everyone on the mortgage.

What Deposit Size Will I Need?

You might need a higher deposit than usual when looking for a steel framed home mortgage. This is because mortgage lenders will want to do what they can to mitigate their risks in lending money for this property type. This type of property is more susceptible to movement and other issues, which means that even if they repossess the house, a mortgage lender may struggle to sell it.

Providing a bigger deposit shows that you’re more financially secure and thus are less likely to default on your mortgage payments. This will make you more attractive to lenders for a non-standard construction mortgage. It’s usually possible to find mortgages for standard properties that only require a deposit of 10% or even 5%. However, for steel frame property mortgage options, you should look at having a deposit of at least 20%.

You should also be aware that the size of the required deposit might be dependent on the details of the property. Some specialist lenders might only take on risky steel framed properties with a higher deposit. For example, properties that are past their expected lifespan might need a higher deposit.

Home Insurance Requirements for Mortgage

As with most mortgage offers, you’ll need to have appropriate home insurance in order to get a mortgage offer. This is usually a requirement to make sure that the house doesn’t get damaged or collapse without the option to repair it. Significant damage would reduce the value of the home and render it unsuitable as the security for the loan.

It can be harder and more expensive to get insurance for a steel framed property. This is due to the additional risks facing these properties. Despite the increased cost, you should make sure that you have sufficient insurance to cover the costs if your house needs major repair or becomes uninhabitable. If you don’t, you could be in an unfortunate situation. If the house becomes uninhabitable, you cannot stop paying the mortgage on it, and would effectively be paying for a property that no longer has value. You need to take steps to properly protect your property.

The Importance of Steel Framed House Surveys

You’ll need to have a full survey done of the property before you apply for a mortgage. This survey needs to be completed by a qualified surveyor. You should choose someone who has experience surveying steel framed buildings. Not only will this help you get more mortgage offers, but it’ll help you avoid problems further down the line.

A surveyor will check a lot of different problems in your potential new home, including:

  • Structural security
  • Any signs of asbestos or other hazardous materials
  • Damp in the walls and floor
  • Corrosion, including checking for rust
  • Subsidence - the movement of the house's foundation
  • Pests and infestations, including vermin such as rats and mice, termites, and woodworms in any flooring
  • Roofing issues, to check for leaks or damage
  • Drain problems, for leaks, blockages, or corrosion

It’s important to remember that steel framed houses still have a range of risks and in-built structural issues. Even if the survey says the property is fine, you should be aware of the problems that can pop up later during your ownership.

What About Mortgages for First-Time Buyers?

First-time buyers are also able to get mortgages for steel-framed properties. You might find that mortgage lenders require a higher deposit for a house like this, compared to a standard home.

Things To Know About Selling a Steel Framed House

There is a concern that steel framed properties are hard to sell. This is due to structural concerns and other issues often present in these properties. The risks combine with the fact that it’s difficult to secure a mortgage, which limits the number of people who could buy your property.

You might not consider how well your new house will sell when you first buy it, but there are plenty of times when a house could hit the market. For example, if you want to move to a new area, upsize to a larger house, or if you leave the house to multiple people in your will and it has to be sold. This means that you should consider the resale options as a standard step in weighing up on buying a house.

How Long Do Steel Framed Homes Last?

Most people look at a property purchase as both somewhere to live, and as an investment, by choosing a home they can leave to their children. However, steel framed houses typically have a lower lifespan than standard houses. This means that buying a property with a steel frame might not be as much of an investment as some people hope. It’s entirely possible that a non-standard construction house could suffer from structural integrity issues before you have a chance to pass it on to future generations. You should consult a surveyor about how long a home is expected to last without problems.

Mortgages for Steel Framed Homes - The Bottom Line

Steel framed homes are an uncommon type of house in the UK. Due to structural issues and low sales prices, you’ll need a specialist mortgage for this type of home. You’ll also have to fulfil additional requirements to get a mortgage, such as having a specialist survey completed. Even with a positive survey, there’s still the risk of issues cropping up with this type of construction.

You can maximise your chance of securing a mortgage by having an above-average deposit saved up, and by doing thorough research on the property you want to buy. As with most types of mortgages, a mortgage broker can help you find the best deals. Going through a broker is important for this type of property, as only a limited number of lenders will offer you mortgage options. Make sure that you look into insurance and the resale market before buying a steel framed home, as these can cause additional problems further down your path of home ownership.

Looking for a mortgage on a steel framed property? Here at John Charcol, we have years of experience helping buyers get specialist mortgage types - get in touch today to see how we can help. Our experts can make sure you find an ideal mortgage for your needs, whether you are buying your first home, a second home, or looking for a buy-to-let investment.

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