Buying a listed building? How to get a mortgage

Converted barns are relatively easy to fund these days. “But the more
unusual the building, such as a windmill or a lighthouse, the more difficult
it becomes.”

Saffron Building Society, which is based in Essex but happy to lend
nationally, adopts a flexible approach to buyers looking to renovate old or
unique properties, Mr Smith said.

Harpenden Building Society is another small lender with a national reach that
specialises in unusual properties. It has financed medieval houses,
timber-framed and thatched properties, as well as converted chapels, barns,
mills, lighthouses, a prefabricated German-made Huf Haus, and a
lighthouse to be converted into a holiday home.

Head of lending Richard Mason said: “We look at each case individually.
The big lenders often have very set criteria, we try to be more flexible,
using local valuers who understand the market and can guide us on likely
demand for the property.”

Like most lenders, Harpenden limits the risk of supplying mortgages on quirky
properties by restricting the maximum loan-to-value (LTV) to 65pc with a
maximum loan amount of £1m. Its current variable rate is 4.19pc, notably
higher than market-leading mortgage rates at similar LTVs. But that’s the
price you pay for buying something special.

A spokesperson for Norwich Peterborough building society said it is also
happy to lend on character properties. “We can help convert an existing
building, such as a barn, windmill or chapel, restore a property that has
fallen into disrepair, or build a home from scratch.”

Buckinghamshire Building Society also tries to be flexible, said chief
executive Ivan Gould. “We will lend on unusual properties up to a
restricted LTV, although a lighthouse would probably be a step too far.”

Ecology Building Society specialises in funding buyers looking to rescue
derelict or run-down properties, which it calls a form of recycling. It will
lend on conversions, eco newbuilds, timber buildings, earth-sheltered
dwellings, and traditional construction methods such as straw bale, thatch,
rammed earth and wattle and daub.

Or you might consider a self-build mortgage, available to people who want to
build their own home from scratch, and often available for renovations as
well.

Self-build portal BuildStore.co.uk offers a range of mortgages for staged
advance payments to help fund your build, mostly from smaller building
societies like Bath, Hanley Economic and Melton Mowbray.

Self-build mortgages also cost more. Saffron BS’s self-build mortgage, for
example, charges a pricey variable rate of 6.39pc with a 2pc arrangement
fee. But there are no early repayment fees, which means you can remortgage
to a cheaper deal once your project is finished.

If you’re struggling to fund your dream purchase, it may be worth speaking to
an independent mortgage broker, who can research what’s available across the
entire market.

Finding a mortgage isn’t the only challenge when buying an unusual property,
you also have to insure it, said Michael McGinty at Swinton Specialist Home. “This
is a niche market which means your premium should be more expensive than on
a standard household policy.”

Your insurer may demand a survey, to check all renovation work has been
carried out professionally. “If you’re buying a thatched cottage, it
may want to know when the thatch was last checked, and what measures you
have taken to prevent fire. Some insurers may cover listed properties, but
the older it is, the narrower your choice.”

You should check you can get affordable insurance before you commit to buying
that special property, Mr McGinty said.

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