Are Non-Construction Properties a Good Investment?
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- Опубліковано 30 лис 2022
- Is buying a non-standard construction property, a good investment? That is the question I'm often asked. I'm going to be dealing with this in this video!
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Hi Kevin, The house I’m intending to buy is non standard construction in uk but I cannot fine much detail in the material. It says bellstone construction. Have you come across this and what are your thoughts on it ? It doesn’t seem to be putting off buyers high offers so wondering how much of a risk it actually is.
thanks for your question. There is an almost endless variety of non-standard construcution properties in the UK. Standard constrction being deemed as either brick or brick & breezeblock. There will be timber-frame, stell and modular variants but the most variations would be the differing forms of concrete construction.
The first consideration in determining a NSC property's mortgagability is when was it built? 21st century will be fine, as it has to conform to the latest Building Regs and the build quality is sufficient. If it was built mid to late 20th century, the question becomes, was it built for the private or public sector? If the public sector, this is where the problems begin. Why? because these properties were built to a budget, not a quality.
Now, particuarly with concrete, it becomes a question of who exactly built it and how many corners did they cut in build qaulity to win the tender. Out of neccessit,y more than anything else, mortgage lenders have built up a pretty encyclopedic knowledge of all the different variations, identfiable by their brand name. e.g. Bellstone to be able to determine which variantsthey were willing to lend on and vice versa.
A good mortgage broker will be able to determine from the brand name how many, or few, lenders are in the mix to lend. - if you need help with this the guys in our brokerage can assist you.
With regard to high offers being put forward, this is no guide to its mortgageability whatsoever. Typically these tough to mortgage properties come to market up to a third cheaper than a standard construction similar property in the same vicinity. The apparent bargain price brings a flurry of offers from people seeing nothing but the low price and think they have bagged themselves a bargain. They pull out once they realise the problmes getting a mortgage on it and that it is cheap for a reason.
Thanks for this detailed information Kevin very much appreciated. The house itself is absolutely solid throughout and doesn’t have any weathering visible unlike most brick built buildings of same era. I’m guessing one of the advantages of buying non standard would be for buy to let as they still command the same rent for lesser outlay. If I get a financial windfall this would be a good route to explore 😮
wmost welcome and you are correct, mortgage lenders generally have stong views on lending for NSC properties but tenants generally dont give it a second thought and will pay the going rate for a property of that size in that vicinty regardless of what its built from.
Hi, I'm looking at making an offer on an 1980's local authority Laing concrete flat which I'd be planning to let. Any thoughts on Laing concrete and whether it's a good 10 year investment ?
its all around the degree of mortgagbility Stuart. Best to ask a mortgage broker how many lenders would consider giving a mortgage on this type of property. The wider the choice, the safer it will be to buy it.
The chances are the capital growth over 10 years wont be the same as a similar brick built property in the same area. However, to factor in that none of the mortgage lenders at the cheaper end of the market will lend on this, you should not really be paying more than 2/3rd of what a similar brick built property in the same area would sell for.
@KevinWrightProperty thanks Kevin, will check on this. I suppose future market value will also be influenced by availability, so it might be a profitable niche if everything's lined up
@@stuartcarr9627 you may be looking at that aspect over-optimistically
Hi Kevin, would single skin fall under the non standard construction? Adam
no, because a single skin is brick, and brick is a standard construction material. Single skin is unmortageable though Adam, as a cavity is required.
@KevinWrightProperty Thank you, yes as I thought. My builder has suggested an insulated render, I'm not sure that this will work/comply
@@dreamcatcher.ltd1 there are different solutions. internal battens, insulation than plasterboarded is another. As often is the case when, trying to assess what will make it mortgageable, engaging the serices of a RICS valuer will define what is most likely to work.
Thanks for the video! We have been accepted for a mortgage on a non-standard construction. But after hearing the horror stories about re sell value and remortgage issues in the future we are being put off. Do these properties still increase in value as standard brick builds?
Who was your lender? We've had an offer accepted, but at the point of sales, we weren't advised of the complexities and are now getting cold feet. Curious to know if you're still progressing?
@@jodielewis3640 the property we put an offer on was a concrete panel construction after researching for a few hours we ended up pulling our offer and just gonna go for a standard construction. Lender was nationwide 5.19%
simple answer Dylan, no they dont. NSC properties always lag behind the equivalent standard construction properties in the same area - often by as much as a 3rd. You should be buying it yp to a 3rd cheaper and you will eventaully sell it up to a 3rd cheaper. the clue to how much of an isse you or your future buyer will face getting a mortgage is, how may lenders are there to choose from?
The broker you are using will tell you how big or small the range of lenders willing to lend is. If, out of the whole market, there is only a choice of 2 or 3, be very concerned - if these stop lending on this type of property in the future, you may be left with a property that can only be sold for cash. This is already thr case with some NSC properties. If there is more than a handful to choose from currently, be less concerned.
@@jodielewis3640 read my reply to Dylan, you ar right to be getting cold feet if what I wrote applies to the property you are buying
@@KevinWrightPropertythanks for the reply, we pulled out. It was a 1960s concrete panel construction. We was restricted to 2 realistic lenders nationwide 5.19% and Leeds building society at 5.78% we are just gonna wait for a standard construction.
Ive fallen in love with a non-standard construction property and i have absolutely no idea whether i should even attempt to get a mortgage for it or not! Its Whitson Fairhurst house and im not even sure if thats good or bad. Can you help, please? 😮
this is a typical NSC property built for local authorities in the mid to late 20th century. This link will tell you more about them -
nonstandardhouse.com/whitson-fairhurst-prc-house/
These are typcially unmortgageable unless they have been repaired and have a PRC certficate to verify it - you need to find out if this one has that certificate.
@@KevinWrightProperty thank you, it didn't have a pcr certificate! Back to the drawing board x
@@Spudthestaffie non-starter then, sadly :( - next....
@@KevinWrightProperty got one! 😀
Is wimpey no fines concrete house alright ?
Plenty of mortgages for steel framed houses fyi
nowhere near as many as for standard construction and at not as such good rates fyi
The critical factors with steel framed houses are when were they built and who built them. 21st Century construction and private sector - fully mortgageable. 20th Century and public sector, were built to a budget not to quality and these have restricted mortgageability fyi
@@KevinWrightProperty again not true there are many steel frames houses which have been maintained and are in perfect condition.
Most lenders do actually lend on them with a structural survey. FYI
@@gards1988 thanks for sharing your opinion. If your background is mortgage brokering, as mine is for over 20 years, we have a different view of the mortgage market around BISF and other local authority built steel framed properties.