There are five non-standard property types deemed too ‘high risk’ for most high street banks to lend on, according to new analysis by specialist lender Together. Pete Ball, personal finance CEO at Together, reveals the top five property types most regularly turned down for a mortgage by the mainstream banks.
1) Penthouses, flats and apartments: “Being positioned at the top of a tall building comes with a range of added risks and costs that you simply don’t get with a similar sized property on ground level. However, it’s not just the penthouses that suffer. We regularly see any flats higher that the sixth floor of a building refused a mortgage for the exact same reason.”
2) Traditional thatched cottages: “Made from specialist materials that are perceived as more susceptible to fire, they are also expensive to maintain, requiring large parts of the roof to be replaced every 8-10 years, thereby reducing the investment appeal and long-term value of such properties.”
3) Unusual properties: “From converting disused water towers, windmills and warehouses, to using modern, ‘non-standard’ construction techniques such as timber framed, concrete, or mostly glass structures, if it’s seen as rare or unusual for the area, it’s more likely to affect saleability in the future and therefore is too much of a risk for most lenders.”
4) Ex-council houses: “The majority of mainstream lenders are still reluctant to provide mortgages on these homes, particularly if more than half the properties in the vicinity are still under local authority ownership.”
5) Flats above a shop: “Many traditional banks are cautious given that these flats are generally thought to be harder to resell, particularly in a slow housing market. The majority of denied mortgages are for properties above restaurants or fast-food outlets, because of their heightened fire risk.”