Concrete construction properties

John_Stiles

What's the deal with concrete construction properties?

From what I gather :



It can be harder to get a mortgage on one of these.

If a bank does lend, the criteria is usually tighter than usual.

There are periods when banks will be less likely to lend, and there are periods when they are more willing to lend.

If the property is structurally sound and the surveyor's report is good, banks can be influenced by this into lending.



How much of all of that is accurate?

kingstreet

I'd say a lot will depend on the type of construction. Simply saying "concrete" covers a multitude of sins, some acceptable, some not.

http://www.prchomes-uk.com/

http://docs.google.com/viewer?a=v&q=cache:xRzSYGmFKO4J:www.parliament.uk/briefing-papers/SN02030.pdf+concrete+defective+housing&hl=en&gl=uk&pid=bl&srcid=ADGEESgcPIRMQag4oR6PbwRMr41SBzC_ZPjHORjIMZSfaDBlL0iykiaYZOV_6cFfMkZK2-4OMXMMB_uXI-WdUYvl-Zi6ryldWPOIY1ziFB-iyJDJ6Rct_fq0_HjVExFwFRoQm7gNHP83&sig=AHIEtbSs5H_vA8O7o2DexnDCVmSB8ZqJzg

For most lenders, it's a simple "yes, we will", or "no, we won't" approach, rather than a qualified yes. They tend to have a set approach they won't deviate from, so a low LTV, good valuation etc won't make any difference.

John_Stiles

Thanks.

I spoke to an estate agent and they said that there are periods in which concrete construction properties aren't favoured by lenders, but that sometimes if one or two people manage to get a mortgage on one that others then begin to do so too. I was given the impression that it goes through phases, ie sometimes they tend to lend, and other times they don't. I'm not sure whether to take an estate agent's word for it. Is there any truth to what I was told? And also, when it comes to selling a concrete property, would it generally, on average, take ages to find a buyer?

paddyrg

Perhaps there are known inherent building flaws in some (say) 60's properties that mean that period is now harder to get insured for? Brick, for instance, has a long pedigree, whereas concrete places have more in common with tower block/flyover construction and may have an inherently shorter life before the material degrades? I would have thought it would depend a lot more on the individual circumstances, but maybe some lenders can't be bothered investigating too deeply on case merits, and just write off the whole sector?

kingstreet

John_Stiles wrote: »

Thanks.

I spoke to an estate agent and they said that there are periods in which concrete construction properties aren't favoured by lenders, but that sometimes if one or two people manage to get a mortgage on one that others then begin to do so too. I was given the impression that it goes through phases, ie sometimes they tend to lend, and other times they don't. I'm not sure whether to take an estate agent's word for it. Is there any truth to what I was told? And also, when it comes to selling a concrete property, would it generally, on average, take ages to find a buyer?

You'll definitely find it takes longer to find a buyer for a non-standard contstruction. A lot will be put off and not even view.

I don't recall mortgagability being cyclical. Properties deemed defective under the Housing Act 1985 have been unmortgageable since then and I can't see you shifting a lender on that. If it isn't on the list it should be mortgagagable as it was in the intervening years.

http://www.ashfield-dc.gov.uk/ccm/navigation/business/estates-management/right-to-buy-council-house-/defective-dwellings/;jsessionid=918F56B13B3206A76D87E8BE783F1F17

Example above.

Richard_Webster

I don't have the same day to day involvement in people getting mortgages as Kingstreet has but my impression is that non-defective concrete houses like Wimpey No-Fines or Reema Conclad (not Hollow Panel) are generally mortgageable with major lenders, but some of the smaller lenders are perhaps more cautious and it could be that kind of property that may vary in its mortgageability, rather than the defective PRC ones which not mortgageable at all.

Interested to see Kingstreet's take on that point.

kingstreet

There was certainly more discretion shown in the earlier part of my career, where you could put a proposition to your local building society manager and have it considered on its own merits. Still, that was true of lending as a whole, rather than concentrated on non-standard construction.

I suppose the other thing to remember is the possibility of repair. We have a few concrete panel properties nearby. Most of them have been repaired over the years, with bricks and mortar replacing the concrete. There is some added value to be gained if you can get such a property cheap enough while being able to fund the rebuild cost from cash.

Richard's probably made the point a little more clearly than I. The grey areas have more or less disappeared. The defective properties will be unmortgagable and those not on the defective list are likely to be mortgagable only with the major players in the mortgage market.

From a purchaser's perspective, you have to have an eye on future saleability and insurability at the outset. Getting the mortgage may be the easy part.