Buying a Home? How to Identify and Avoid Non-Mortgageable Properties

Purchasing a home is a major investment, but some properties may be deemed non-mortgageable properties, making it difficult to secure financing. Understanding the factors that affect a property’s mortgageability can help you avoid costly pitfalls.

What Are Non-Mortgageable Properties?

Non-mortgageable properties are homes that lenders consider too risky to finance. This means buyers must rely on cash purchases or seek alternative financing options. Lenders typically avoid properties that:

• Have severe structural issues

• Are made from non-standard construction materials

• Lack essential legal documentation

• Are in high-risk locations, such as flood zones

• Are flats above shops

• Are concrete high-rise buildings

• Are flats without an EWS1 certificate

• Have cladding issues

• Are deemed uninhabitable due to significant damage or disrepair

• Are ex-council blocks with a lack of privately owned properties

Common Reasons a Property Might Be Non-Mortgageable

1. Structural Problems

Properties with major structural issues, such as subsidence or unstable foundations, may not qualify for a mortgage. A structural survey can help identify these risks before you commit to a purchase.

2. Non-Standard Construction

Homes built with unusual materials, such as concrete or timber frames, can be harder to finance. Lenders prefer traditional brick-and-mortar construction. High-rise concrete buildings may also be classified as non-mortgageable properties due to durability concerns.

3. Short Leasehold Properties

Flats or houses with leaseholds of fewer than 70 years often struggle to secure a mortgage. Extending the lease before purchasing may improve mortgageability.

4. Missing Planning Permissions

Properties with unapproved modifications or missing building regulations can be flagged as high risk. Ensure all necessary permissions are in place before proceeding.

5. Location and Property Type Risks

Homes in flood zones, near landfills, above shops or with restrictive legal covenants may be classified as non-mortgageable properties due to increased risk. Additionally, flats above shops can be seen as higher-risk investments due to noise, business activity, and potential maintenance issues.

6. Fire Safety and Cladding Issues

Flats that lack an EWS1 certificate or have cladding issues following fire safety regulations may not be mortgageable. Lenders often require proof that the building meets safety standards before approving a mortgage.

7. Uninhabitable Condition

Homes deemed uninhabitable due to severe disrepair, lack of utilities, or extensive damage may not qualify for a mortgage. Renovation may be required before lenders consider financing.

8. Ex-Council Blocks with Limited Private Ownership

Many lenders are reluctant to approve mortgages for ex-council blocks where a high percentage of units are still owned by the local authority. A lack of privately owned properties in the building can make it difficult to secure financing.

How to Avoid Non-Mortgageable Properties

To ensure your potential home is mortgageable, follow these steps:

• Conduct a thorough property survey.

• Check the leasehold length and terms.

• Verify building regulations and planning permissions.

• Research the location for environmental and property type risks.

• Ensure flats in high-rise buildings have an EWS1 certificate and are free from cladding issues.

• Confirm the proportion of privately owned units in ex-council blocks before purchasing.

If you’re unsure about a property’s mortgageability, our team at Possible Mortgages can

guide you through the process.

What to Do If a Property Is Non-Mortgageable

If you discover a home is non-mortgageable, you have several options:

• Negotiate with the seller to address issues before purchase.

• Seek specialist lenders who provide financing for high-risk properties.

• Consider alternative financing, such as bridging loans, for short-term solutions.

For more information on mortgage options, visit our Mortgage in Principle page.

Final Thoughts

Identifying and avoiding non-mortgageable properties is crucial when buying a home. By conducting due diligence and seeking expert advice, you can secure a mortgage-friendly property and avoid unexpected hurdles. Need assistance? Contact us today for expert mortgage guidance.

Your home may be repossessed if you do not keep up repayments on your mortgage.